3 ASX Stocks Estimated To Be Trading At Discounts Ranging From 18.5% To 48.3%
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The Australian market has seen a 1.1% increase over the last week, with the Materials sector leading at 6.8%, and it is up 18% over the past year, with earnings forecasted to grow by 12% annually. In this favorable environment, identifying undervalued stocks can provide opportunities for investors looking to capitalize on potential growth at discounted prices.
Top 10 Undervalued Stocks Based On Cash Flows In Australia
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| EZZ Life Science Holdings (ASX:EZZ) | A$4.55 | A$8.78 | 48.2% |
| Duratec (ASX:DUR) | A$1.37 | A$2.59 | 47.2% |
| Genesis Minerals (ASX:GMD) | A$2.09 | A$3.93 | 46.8% |
| Charter Hall Group (ASX:CHC) | A$15.59 | A$29.33 | 46.8% |
| Ingenia Communities Group (ASX:INA) | A$5.02 | A$9.39 | 46.5% |
| Little Green Pharma (ASX:LGP) | A$0.086 | A$0.17 | 49.2% |
| MedAdvisor (ASX:MDR) | A$0.435 | A$0.85 | 48.9% |
| Millennium Services Group (ASX:MIL) | A$1.145 | A$2.24 | 48.9% |
| IperionX (ASX:IPX) | A$3.42 | A$6.62 | 48.3% |
| Superloop (ASX:SLC) | A$1.785 | A$3.31 | 46.1% |
Below we spotlight a couple of our favorites from our exclusive screener.
Domino's Pizza Enterprises
Overview: Domino's Pizza Enterprises Limited operates retail food outlets and has a market capitalization of A$3.15 billion.
Operations: The company generates revenue of A$2.38 billion from its restaurant operations.
Estimated Discount To Fair Value: 18.5%
Domino's Pizza Enterprises shows potential as an undervalued stock based on cash flows, trading at A$34.04, which is 18.5% below its estimated fair value of A$41.78. Despite a recent class action lawsuit and being dropped from the S&P/ASX 100 Index, the company reported strong earnings growth with net income rising to A$95.96 million for FY2024 and earnings projected to grow significantly over the next three years.
Hansen Technologies
Overview: Hansen Technologies Limited (ASX:HSN) develops, integrates, and supports billing systems software for the energy, utilities, communications, and media sectors with a market cap of A$957.18 million.
Operations: The company generates revenue primarily from its billing segment, amounting to A$347.61 million.
Estimated Discount To Fair Value: 42.5%
Hansen Technologies is trading at A$4.71, significantly below its estimated fair value of A$8.19, reflecting strong undervaluation based on cash flows. Despite a decrease in profit margins from 13.7% to 6%, earnings are forecast to grow significantly over the next three years, outpacing the Australian market average growth rate. Recent developments include a renewed agreement with Norway's Area Nett AS for its cloud-based Customer Information System, potentially enhancing future revenue streams and operational efficiency.