ASX November 2024 Stocks Estimated To Be Trading Below Fair Value
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The Australian stock market recently experienced a downturn, with the ASX200 dropping to a seven-week low, driven largely by declines in the Health Care and Financials sectors. In such volatile conditions, identifying stocks that may be trading below their fair value can present potential opportunities for investors looking to capitalize on market inefficiencies.
Top 10 Undervalued Stocks Based On Cash Flows In Australia
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| DUG Technology (ASX:DUG) | A$1.845 | A$3.48 | 47% |
| Ansell (ASX:ANN) | A$30.91 | A$57.84 | 46.6% |
| MLG Oz (ASX:MLG) | A$0.62 | A$1.15 | 46.2% |
| Audinate Group (ASX:AD8) | A$8.99 | A$17.81 | 49.5% |
| Megaport (ASX:MP1) | A$6.81 | A$13.42 | 49.3% |
| IDP Education (ASX:IEL) | A$13.99 | A$27.37 | 48.9% |
| Millennium Services Group (ASX:MIL) | A$1.145 | A$2.24 | 48.9% |
| Smart Parking (ASX:SPZ) | A$0.73 | A$1.31 | 44.3% |
| Energy One (ASX:EOL) | A$5.65 | A$11.04 | 48.8% |
| Mineral Resources (ASX:MIN) | A$40.61 | A$79.07 | 48.6% |
Underneath we present a selection of stocks filtered out by our screen.
Infomedia
Overview: Infomedia Ltd is a technology company that develops and supplies electronic parts catalogues, service quoting software, and e-commerce solutions for the automotive industry worldwide, with a market cap of A$532.16 million.
Operations: The company's revenue comes from its publishing segment, specifically periodicals, amounting to A$140.83 million.
Estimated Discount To Fair Value: 41.8%
Infomedia is trading at A$1.4, significantly below its estimated fair value of A$2.41, suggesting it is undervalued based on cash flows. The company's earnings grew by 32.4% over the past year and are forecast to grow significantly at 22% per year, outpacing the Australian market's growth rate. Despite a dividend not well covered by earnings and large one-off items impacting results, analysts agree on a potential price rise of 45.1%.
Mineral Resources
Overview: Mineral Resources Limited, along with its subsidiaries, operates as a mining services company in Australia, Asia, and internationally with a market cap of A$7.68 billion.
Operations: The company's revenue segments include A$16 million from Energy, A$1.41 billion from Lithium, A$2.58 billion from Iron Ore, and A$3.38 billion from Mining Services, along with A$19 million from Other Commodities.
Estimated Discount To Fair Value: 48.6%
Mineral Resources, trading at A$40.61, is significantly undervalued based on cash flows with an estimated fair value of A$79.07. Although its profit margins have decreased to 2.4% from 5.1% last year, earnings are expected to grow substantially at 38.8% annually over the next three years, outpacing the Australian market's growth rate of 12.3%. The company is exploring asset sales and partnerships to address its high net debt of A$4.4 billion and fund future projects like the Onslow iron ore project.