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In a turbulent day for the Australian market, the ASX200 fell by 0.9%, with sectors like IT and Industrials experiencing significant declines while Utilities and Energy managed to post gains. In such fluctuating conditions, identifying stocks that might be trading below their estimated worth can offer potential opportunities for investors seeking value amidst broader market volatility.
Top 10 Undervalued Stocks Based On Cash Flows In Australia
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| Acrow (ASX:ACF) | A$1.03 | A$2.00 | 48.4% |
| Domino's Pizza Enterprises (ASX:DMP) | A$26.71 | A$52.52 | 49.1% |
| Nido Education (ASX:NDO) | A$0.87 | A$1.62 | 46.1% |
| Champion Iron (ASX:CIA) | A$4.91 | A$9.07 | 45.9% |
| Cettire (ASX:CTT) | A$0.925 | A$1.72 | 46.1% |
| SciDev (ASX:SDV) | A$0.41 | A$0.81 | 49.5% |
| Charter Hall Group (ASX:CHC) | A$16.37 | A$31.81 | 48.5% |
| Electro Optic Systems Holdings (ASX:EOS) | A$1.14 | A$2.26 | 49.6% |
| ReadyTech Holdings (ASX:RDY) | A$2.75 | A$5.20 | 47.2% |
| Adriatic Metals (ASX:ADT) | A$4.26 | A$8.14 | 47.7% |
We're going to check out a few of the best picks from our screener tool.
Catalyst Metals
Overview: Catalyst Metals Limited explores and evaluates mineral properties in Australia, with a market cap of A$928.79 million.
Operations: The company's revenue segments include A$93.77 million from Tasmania and A$315.38 million from Western Australia.
Estimated Discount To Fair Value: 15.6%
Catalyst Metals reported A$224.1 million in sales for the half-year ending December 2024, up from A$133.81 million a year earlier, with net income reaching A$46.29 million compared to a previous loss. Trading at approximately 15.6% below its estimated fair value of A$4.87 per share, it shows potential as an undervalued stock based on cash flows despite insider selling and moderate growth forecasts in earnings and revenue relative to the market.
Lynas Rare Earths
Overview: Lynas Rare Earths Limited operates in the exploration, development, mining, extraction, and processing of rare earth minerals in Australia and Malaysia with a market capitalization of A$6.55 billion.
Operations: The company's revenue is primarily generated from its rare earth operations, amounting to A$482.82 million.
Estimated Discount To Fair Value: 21.4%
Lynas Rare Earths reported A$254.31 million in sales for the half-year ending December 2024, up from A$234.78 million a year earlier, though net income dropped to A$5.85 million from A$39.54 million. Trading at about 21% below its estimated fair value of A$8.91 per share, it presents potential as an undervalued stock based on cash flows despite declining profit margins and high levels of non-cash earnings impacting perceived quality.