3 TSX Stocks Estimated To Be Undervalued For September 2024
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The Canadian market experienced significant volatility in August, with a strong start and a subdued finish, ultimately recovering from an early-month dip of nearly 5%. As the economy continues to expand and inflation trends closer to target, investors are shifting their focus towards growth opportunities. In this context, identifying undervalued stocks can be crucial for capitalizing on potential gains during periods of market fluctuation.
Top 10 Undervalued Stocks Based On Cash Flows In Canada
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| goeasy (TSX:GSY) | CA$189.67 | CA$357.90 | 47% |
| Computer Modelling Group (TSX:CMG) | CA$12.74 | CA$22.26 | 42.8% |
| Alvopetro Energy (TSXV:ALV) | CA$5.04 | CA$9.00 | 44% |
| Kinaxis (TSX:KXS) | CA$147.32 | CA$279.54 | 47.3% |
| Obsidian Energy (TSX:OBE) | CA$9.26 | CA$18.08 | 48.8% |
| Africa Oil (TSX:AOI) | CA$2.06 | CA$3.66 | 43.8% |
| Calibre Mining (TSX:CXB) | CA$2.28 | CA$4.53 | 49.6% |
| Viemed Healthcare (TSX:VMD) | CA$10.45 | CA$20.08 | 48% |
| NFI Group (TSX:NFI) | CA$19.31 | CA$37.43 | 48.4% |
| NanoXplore (TSX:GRA) | CA$2.25 | CA$4.18 | 46.1% |
Let's uncover some gems from our specialized screener.
Africa Oil
Overview: Africa Oil Corp., along with its subsidiaries, engages in oil and gas exploration and production in Kenya, Nigeria, and South Africa, with a market cap of CA$912.61 million.
Operations: Africa Oil Corp. generates revenue through its oil and gas exploration and production activities in Kenya, Nigeria, and South Africa.
Estimated Discount To Fair Value: 43.8%
Africa Oil is trading at CA$2.06, significantly below its estimated fair value of CA$3.66, making it highly undervalued based on discounted cash flow analysis. Despite a challenging year with revenue dropping to US$16.9 million from US$210.5 million and net income falling sharply, the company is expected to become profitable within three years, with earnings forecasted to grow 62.75% annually and revenue projected to increase by 45.1% per year.
B2Gold
Overview: B2Gold Corp. is a gold producer with a market cap of CA$4.97 billion.
Operations: B2Gold Corp. generates revenue from three primary segments: Fekola Mine ($1.07 billion), Masbate Mine ($412.67 million), and Otjikoto Mine ($456.41 million).
Estimated Discount To Fair Value: 10.8%
B2Gold, trading at CA$3.79, is undervalued based on its discounted cash flow analysis with a fair value estimate of CA$4.25. Despite recent impairments and lower production guidance for 2024 due to equipment issues, the company remains poised for future profitability with earnings expected to grow annually by 46.17%. However, the dividend yield of 5.69% is not well covered by earnings or free cash flows, which may be a concern for income-focused investors.