3 ASX Stocks Estimated To Be Trading At Discounts Of 20.8% To 37.8%

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The market has climbed 2.5% in the last 7 days, with a gain of 4.5%, and over the past 12 months, it is up 11%. Earnings are forecast to grow by 13% annually, making it an opportune time to identify stocks trading below their intrinsic value. In this article, we will explore three ASX stocks currently estimated to be trading at discounts ranging from 20.8% to 37.8%, presenting potential opportunities for investors looking to capitalize on undervalued assets in a growing market.

Top 10 Undervalued Stocks Based On Cash Flows In Australia

Name

Current Price

Fair Value (Est)

Discount (Est)

LaserBond (ASX:LBL)

A$0.71

A$1.37

48.1%

Elders (ASX:ELD)

A$9.33

A$18.11

48.5%

Regal Partners (ASX:RPL)

A$3.40

A$6.63

48.7%

Shine Justice (ASX:SHJ)

A$0.72

A$1.35

46.7%

Megaport (ASX:MP1)

A$11.21

A$21.52

47.9%

Domino's Pizza Enterprises (ASX:DMP)

A$33.76

A$63.86

47.1%

hipages Group Holdings (ASX:HPG)

A$1.16

A$2.31

49.7%

Treasury Wine Estates (ASX:TWE)

A$12.23

A$24.19

49.4%

Millennium Services Group (ASX:MIL)

A$1.145

A$2.24

48.9%

Airtasker (ASX:ART)

A$0.27

A$0.52

48.4%

Click here to see the full list of 37 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.

Life360

Overview: Life360, Inc. operates a technology platform for locating people, pets, and things across North America, Europe, the Middle East, Africa, and internationally with a market cap of A$4.03 billion.

Operations: The company's revenue primarily comes from its Software & Programming segment, which generated $328.68 million.

Estimated Discount To Fair Value: 37.8%

Life360 is trading at A$18.12, significantly below its estimated fair value of A$29.15, indicating it may be undervalued based on cash flows. Despite recent shareholder dilution and substantial insider selling, the company’s revenue is forecast to grow 15.7% per year, outpacing the Australian market's 5.3%. Recent partnerships with Arity and Placer.ai are expected to generate incremental revenue in 2024 and beyond, supporting Life360's pursuit of profitability within three years.

ASX:360 Discounted Cash Flow as at Aug 2024
ASX:360 Discounted Cash Flow as at Aug 2024

IPD Group

Overview: IPD Group Limited, with a market cap of A$474.51 million, distributes electrical equipment in Australia.

Operations: The company generates revenue from two main segments: A$215.98 million from its Products Division and A$20.79 million from its Services Division.

Estimated Discount To Fair Value: 25.4%

IPD Group is trading at A$4.59, below its estimated fair value of A$6.16, making it undervalued based on cash flows. Despite past shareholder dilution and recent insider selling, IPD's revenue is forecast to grow 23.6% annually—faster than the Australian market's 5.3%. Earnings are expected to increase significantly over the next three years, with a projected annual growth rate of 25.9%, outpacing the broader market's 13%.

ASX:IPG Discounted Cash Flow as at Aug 2024
ASX:IPG Discounted Cash Flow as at Aug 2024

Viva Energy Group

Overview: Viva Energy Group Limited operates as an energy company in Australia, Singapore, and Papua New Guinea with a market cap of A$4.84 billion.

Operations: The company's revenue segments include Convenience & Mobility (A$10.10 billion), Commercial & Industrial (A$16.64 billion), and Energy & Infrastructure (A$7.32 billion).

Estimated Discount To Fair Value: 20.8%

Viva Energy Group, trading at A$3.05, is undervalued based on cash flows with an estimated fair value of A$3.85. Despite past shareholder dilution and a dividend not well covered by earnings or free cash flows, VEA's earnings are forecast to grow significantly at 31.99% annually over the next three years, outpacing the Australian market's 13%. Recently added to the S&P/ASX 100 Index, analysts agree on a potential stock price rise of 25.6%.

ASX:VEA Discounted Cash Flow as at Aug 2024
ASX:VEA Discounted Cash Flow as at Aug 2024

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include ASX:360 ASX:IPG and ASX:VEA.

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