In This Article:
In December 2024, global markets have been grappling with cautious Federal Reserve commentary and political uncertainties, leading to broad-based declines in U.S. stocks and heightened volatility across major indices. Amidst this challenging environment, investors are increasingly seeking opportunities in stocks that may be trading below their estimated value, as these can potentially offer attractive entry points when market sentiment stabilizes.
Top 10 Undervalued Stocks Based On Cash Flows
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| Alltop Technology (TPEX:3526) | NT$265.50 | NT$530.93 | 50% |
| Wasion Holdings (SEHK:3393) | HK$7.03 | HK$14.06 | 50% |
| Kuaishou Technology (SEHK:1024) | HK$42.45 | HK$84.87 | 50% |
| Lindab International (OM:LIAB) | SEK226.40 | SEK451.11 | 49.8% |
| GlobalData (AIM:DATA) | £1.87 | £3.74 | 50% |
| Absolent Air Care Group (OM:ABSO) | SEK255.00 | SEK509.90 | 50% |
| T'Way Air (KOSE:A091810) | ₩2520.00 | ₩5038.37 | 50% |
| Medley (TSE:4480) | ¥3835.00 | ¥7639.79 | 49.8% |
| Surgical Science Sweden (OM:SUS) | SEK159.10 | SEK317.61 | 49.9% |
| GRCS (TSE:9250) | ¥1415.00 | ¥2820.34 | 49.8% |
Let's dive into some prime choices out of the screener.
HMS Networks
Overview: HMS Networks AB (publ) provides products that facilitate communication and information sharing among industrial equipment globally, with a market cap of SEK22.04 billion.
Operations: The company's revenue segment includes Wireless Communications Equipment, generating SEK3.01 billion.
Estimated Discount To Fair Value: 20.9%
HMS Networks is trading at SEK 439.2, significantly below its estimated fair value of SEK 554.98, making it highly undervalued based on discounted cash flow analysis. Despite a decline in net profit margins to 11.5% from last year's 20.2%, the company's earnings are expected to grow at a robust rate of over 40% annually, outpacing both its revenue growth and the broader Swedish market's earnings growth forecast of 14.7%.
Arabian Contracting Services
Overview: Arabian Contracting Services Company, along with its subsidiaries, operates in the printing business in Saudi Arabia and Egypt, with a market cap of SAR7.20 billion.
Operations: The company generates revenue primarily from its Advertising Segment, which amounts to SAR1.52 billion.
Estimated Discount To Fair Value: 42.6%
Arabian Contracting Services is trading at SAR 144, well below its estimated fair value of SAR 250.65, indicating significant undervaluation based on discounted cash flow analysis. Despite a drop in net profit margins from 26.6% to 17.8%, earnings are projected to grow substantially at over 31% annually, surpassing the Saudi Arabian market's growth forecast of 6%. However, interest payments remain inadequately covered by earnings, posing a financial challenge.