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Top ASX Stocks Estimated To Be Undervalued In July 2024

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The Australian stock market has shown robust growth, climbing 3.1% over the past week and achieving a 10% increase over the last year, with earnings expected to grow by 13% annually. In this context, identifying stocks that are potentially undervalued could offer investors an opportunity to capitalize on this positive momentum.

Top 10 Undervalued Stocks Based On Cash Flows In Australia

Name

Current Price

Fair Value (Est)

Discount (Est)

GTN (ASX:GTN)

A$0.435

A$0.85

48.7%

Ansell (ASX:ANN)

A$25.52

A$49.46

48.4%

VEEM (ASX:VEE)

A$1.78

A$3.54

49.7%

hipages Group Holdings (ASX:HPG)

A$1.04

A$2.06

49.4%

Australian Clinical Labs (ASX:ACL)

A$2.37

A$4.66

49.1%

ReadyTech Holdings (ASX:RDY)

A$3.20

A$6.20

48.4%

IPH (ASX:IPH)

A$6.15

A$11.83

48%

Strike Energy (ASX:STX)

A$0.21

A$0.40

48%

Millennium Services Group (ASX:MIL)

A$1.145

A$2.24

48.9%

MedAdvisor (ASX:MDR)

A$0.56

A$1.07

47.8%

Click here to see the full list of 50 stocks from our Undervalued ASX Stocks Based On Cash Flows screener.

Let's explore several standout options from the results in the screener.

Australian Clinical Labs

Overview: Australian Clinical Labs Limited operates in Australia, offering pathology services with a market capitalization of approximately A$475.19 million.

Operations: The company generates revenue primarily through its medical labs and research segment, totaling A$674.03 million.

Estimated Discount To Fair Value: 49.1%

Australian Clinical Labs (ACL) appears undervalued based on discounted cash flow analysis, trading at A$2.37 against a fair value of A$4.66, indicating a significant potential upside. Despite this, ACL's revenue growth is modest at 4.6% per year and lags behind the broader Australian market forecast of 5.3%. Profit margins have declined from last year's 9% to 2.3%, reflecting challenges despite earnings projected to grow by approximately 21% annually, outpacing the market expectation of 13.3%. Analyst consensus suggests a potential price increase of around 30.6%.

ASX:ACL Discounted Cash Flow as at Jul 2024
ASX:ACL Discounted Cash Flow as at Jul 2024

IPD Group

Overview: IPD Group Limited, operating in Australia, specializes in the distribution of electrical equipment and has a market capitalization of approximately A$497.26 million.

Operations: The company generates revenue through its Products Division, which brought in A$215.98 million, and its Services Division, which contributed A$20.79 million.

Estimated Discount To Fair Value: 12.5%