Codan And Two More ASX Stocks Considered Below Estimated Value

In This Article:

The Australian stock market has shown modest activity recently, remaining flat over the last week but gaining 6.2% over the past year, with earnings projected to grow by 14% annually. In this context, identifying stocks that are trading below their estimated value could offer attractive opportunities for investors looking for potential growth in a steadily advancing market.

Top 10 Undervalued Stocks Based On Cash Flows In Australia

Name

Current Price

Fair Value (Est)

Discount (Est)

LaserBond (ASX:LBL)

A$0.695

A$1.21

42.4%

Smart Parking (ASX:SPZ)

A$0.48

A$0.96

49.9%

COSOL (ASX:COS)

A$1.25

A$2.43

48.6%

MaxiPARTS (ASX:MXI)

A$1.88

A$3.13

40%

Charter Hall Group (ASX:CHC)

A$12.44

A$22.79

45.4%

ReadyTech Holdings (ASX:RDY)

A$3.22

A$5.96

45.9%

Mader Group (ASX:MAD)

A$6.51

A$12.62

48.4%

hipages Group Holdings (ASX:HPG)

A$1.035

A$1.94

46.7%

IPH (ASX:IPH)

A$6.16

A$11.35

45.7%

Millennium Services Group (ASX:MIL)

A$1.145

A$2.24

48.9%

Click here to see the full list of 49 stocks from our Undervalued ASX Stocks Based On Cash Flows screener.

Let's take a closer look at a couple of our picks from the screened companies

Codan

Overview: Codan Limited specializes in developing technology solutions for a diverse range of clients including United Nations organizations, mining companies, and security forces, with a market capitalization of approximately A$2.07 billion.

Operations: The company generates revenue primarily through its Communications and Metal Detection segments, earning A$291.50 million and A$212.20 million respectively.

Estimated Discount To Fair Value: 24.5%

Codan, currently priced at A$11.42, appears undervalued by over 20% compared to its estimated fair value of A$15.13 based on discounted cash flows. The company's return on equity is expected to be robust at 21.5% in three years, outpacing the Australian market forecast of 5.4%. With earnings projected to expand by 16.2% annually, Codan's growth trajectory exceeds the average market prediction of 13.7%, highlighting its potential despite not being significantly above a 20% growth threshold.

ASX:CDA Discounted Cash Flow as at Jun 2024
ASX:CDA Discounted Cash Flow as at Jun 2024

Mader Group

Overview: Mader Group Limited is a contracting company offering specialist technical services in the mining, energy, and industrial sectors both in Australia and internationally, with a market capitalization of approximately A$1.30 billion.

Operations: The company generates its revenue primarily through staffing and outsourcing services, amounting to A$702.87 million.