In This Article:
As the Canadian market navigates a period of economic adjustment, with inflationary pressures easing and interest rates potentially on the decline, investors are keenly observing opportunities that may arise from these shifting conditions. In this environment, identifying stocks that are priced below their intrinsic value can be particularly rewarding, as they offer potential for growth when market conditions stabilize.
Top 10 Undervalued Stocks Based On Cash Flows In Canada
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| Savaria (TSX:SIS) | CA$16.53 | CA$30.37 | 45.6% |
| Docebo (TSX:DCBO) | CA$44.29 | CA$85.17 | 48% |
| Thunderbird Entertainment Group (TSXV:TBRD) | CA$1.65 | CA$3.26 | 49.4% |
| Groupe Dynamite (TSX:GRGD) | CA$14.29 | CA$27.63 | 48.3% |
| Lithium Royalty (TSX:LIRC) | CA$5.10 | CA$9.19 | 44.5% |
| Tourmaline Oil (TSX:TOU) | CA$68.85 | CA$136.58 | 49.6% |
| Kits Eyecare (TSX:KITS) | CA$12.42 | CA$24.64 | 49.6% |
| Aya Gold & Silver (TSX:AYA) | CA$12.82 | CA$25.01 | 48.7% |
| Wishpond Technologies (TSXV:WISH) | CA$0.285 | CA$0.56 | 48.7% |
| Electrovaya (TSX:ELVA) | CA$3.51 | CA$5.90 | 40.5% |
Here's a peek at a few of the choices from the screener.
AtkinsRéalis Group
Overview: AtkinsRéalis Group Inc. offers professional services, project management, and capital investment services across the United Kingdom, Canada, the United States, Saudi Arabia, and internationally with a market cap of CA$12.38 billion.
Operations: The company's revenue is primarily derived from Engineering Services in the UKI (CA$2.48 billion), USLA (CA$1.71 billion), AMEA (CA$1.32 billion), and Canada (CA$1.46 billion) regions, along with contributions from Nuclear services (CA$1.49 billion), Linxon (CA$835.68 million), Capital investments (CA$126.06 million), and LSTK Projects (CA$249.37 million).
Estimated Discount To Fair Value: 32.8%
AtkinsRéalis Group is trading at CA$70.04, significantly below its estimated fair value of CA$104.23, indicating potential undervaluation based on cash flows. Earnings are projected to grow 21.8% annually, outpacing the Canadian market's growth rate. Recent contracts, including a high-speed rail project in Canada and infrastructure work in Puerto Rico, bolster its revenue prospects and operational footprint despite a modest net income decline last year to CA$283.87 million from CA$287.21 million.
BRP
Overview: BRP Inc. is a company that designs, develops, manufactures, distributes, and markets powersports vehicles and marine products globally, with a market cap of approximately CA$3.98 billion.