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The Australian market has been experiencing some turbulence, with tariff uncertainties impacting investor sentiment and resulting in a mixed performance across sectors. Amidst this volatility, identifying undervalued stocks can be an attractive strategy for investors looking to capitalize on potential discounts, particularly when the broader market faces headwinds.
Top 10 Undervalued Stocks Based On Cash Flows In Australia
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| Regal Partners (ASX:RPL) | A$3.10 | A$5.88 | 47.3% |
| Acrow (ASX:ACF) | A$1.045 | A$2.00 | 47.8% |
| Domino's Pizza Enterprises (ASX:DMP) | A$26.86 | A$51.38 | 47.7% |
| PointsBet Holdings (ASX:PBH) | A$1.085 | A$2.14 | 49.4% |
| Charter Hall Group (ASX:CHC) | A$16.94 | A$31.75 | 46.6% |
| SciDev (ASX:SDV) | A$0.44 | A$0.81 | 45.8% |
| South32 (ASX:S32) | A$3.51 | A$6.44 | 45.5% |
| Pantoro (ASX:PNR) | A$0.135 | A$0.26 | 48.1% |
| ReadyTech Holdings (ASX:RDY) | A$2.79 | A$5.14 | 45.8% |
| Adriatic Metals (ASX:ADT) | A$4.45 | A$8.25 | 46.1% |
Let's review some notable picks from our screened stocks.
Data#3
Overview: Data#3 Limited provides information technology solutions and services across Australia, Fiji, and the Pacific Islands, with a market capitalization of A$1.21 billion.
Operations: The company's revenue is generated from its role as a value-added IT reseller and IT solutions provider, amounting to A$798.05 million.
Estimated Discount To Fair Value: 24.6%
Data#3's current trading price of A$7.80 is 24.6% below its estimated fair value of A$10.34, highlighting potential undervaluation based on cash flows. Despite a recent decline in net income to A$22.35 million, the company anticipates revenue growth of 25% annually, outpacing the Australian market average of 5.8%. However, earnings growth at 10.79% per year lags behind market expectations, and its dividend yield is not fully covered by earnings, which could pose risks for investors seeking sustainable returns.
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The analysis detailed in our Data#3 growth report hints at robust future financial performance.
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Unlock comprehensive insights into our analysis of Data#3 stock in this financial health report.
Genesis Minerals
Overview: Genesis Minerals Limited focuses on the exploration, production, and development of gold deposits in Western Australia, with a market cap of A$3.58 billion.
Operations: The company generates revenue of A$561.40 million from its activities in mineral production, exploration, and development.
Estimated Discount To Fair Value: 26.3%
Genesis Minerals is trading at A$3.17, significantly below its fair value estimate of A$4.3, suggesting potential undervaluation based on cash flows. The company recently reported strong half-year earnings with net income rising to A$59.8 million from A$24.05 million the previous year, and increased gold production guidance for 2025 to 190,000-210,000 oz. Despite a modest return on equity forecast of 15.8%, Genesis's earnings are expected to grow significantly at 23% annually over the next three years, outpacing the Australian market average growth rate of 11.9%.