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The Australian market has climbed 1.2% in the last 7 days and is up 9.8% over the last 12 months, with earnings forecast to grow by 13% annually. In this favorable environment, identifying undervalued stocks can provide significant opportunities for investors looking to capitalize on potential growth while minimizing risk.
Top 10 Undervalued Stocks Based On Cash Flows In Australia
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| LaserBond (ASX:LBL) | A$0.705 | A$1.36 | 48.2% |
| Fenix Resources (ASX:FEX) | A$0.43 | A$0.86 | 49.8% |
| Elders (ASX:ELD) | A$9.52 | A$18.11 | 47.4% |
| Shine Justice (ASX:SHJ) | A$0.695 | A$1.32 | 47.3% |
| Domino's Pizza Enterprises (ASX:DMP) | A$32.77 | A$63.47 | 48.4% |
| Orora (ASX:ORA) | A$2.04 | A$3.91 | 47.8% |
| Millennium Services Group (ASX:MIL) | A$1.145 | A$2.24 | 48.9% |
| City Chic Collective (ASX:CCX) | A$0.105 | A$0.20 | 47.6% |
| SiteMinder (ASX:SDR) | A$5.60 | A$10.44 | 46.4% |
| Sandfire Resources (ASX:SFR) | A$8.70 | A$16.53 | 47.4% |
Here's a peek at a few of the choices from the screener.
Goodman Group
Overview: Goodman Group is an integrated property group with global operations across Australia, New Zealand, Asia, Europe, the United Kingdom and the Americas, boasting a market cap of A$69.21 billion.
Operations: The company's revenue segments span Australia (A$1.23 billion), New Zealand (A$0.45 billion), Asia (A$0.98 billion), Europe (A$1.67 billion), the United Kingdom (A$0.76 billion) and the Americas (A$2.34 billion).
Estimated Discount To Fair Value: 10%
Goodman Group (A$36.44) is trading below its fair value estimate of A$40.5, making it an undervalued stock based on cash flows. Earnings are forecast to grow 28.57% annually over the next three years, outpacing both revenue growth (20.5%) and the broader Australian market's earnings growth (13.2%). Despite lower profit margins this year, Goodman upgraded its fiscal 2024 earnings guidance with a projected EPS growth of 13% and a full-year distribution of A$0.30 per share.
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Our growth report here indicates Goodman Group may be poised for an improving outlook.
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Click here to discover the nuances of Goodman Group with our detailed financial health report.
Lynas Rare Earths
Overview: Lynas Rare Earths Limited, with a market cap of A$5.87 billion, engages in the exploration, development, mining, extraction, and processing of rare earth minerals in Australia and Malaysia.
Operations: Revenue from rare earth operations amounted to A$604.08 million.
Estimated Discount To Fair Value: 34.5%
Lynas Rare Earths (A$6.28) is trading significantly below its fair value estimate of A$9.58, presenting an undervalued opportunity based on cash flows. Earnings are forecast to grow 33.2% annually over the next three years, outpacing both revenue growth (28.8%) and the broader Australian market's earnings growth (13.2%). However, profit margins have declined from 54.8% to 33.1%, and Return on Equity is expected to remain low at 14.4%.