3 ASX Stocks That May Be Trading Below Their Intrinsic Value Estimates
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The Australian market has shown positive momentum, rising 1.7% over the last week and 18% over the past year, with earnings expected to grow by 12% annually. In this environment of growth, identifying stocks that may be trading below their intrinsic value can offer potential opportunities for investors seeking to capitalize on undervalued assets.
Top 10 Undervalued Stocks Based On Cash Flows In Australia
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| Data#3 (ASX:DTL) | A$7.36 | A$13.47 | 45.4% |
| Mader Group (ASX:MAD) | A$5.57 | A$10.43 | 46.6% |
| Accent Group (ASX:AX1) | A$2.43 | A$4.81 | 49.4% |
| Ansell (ASX:ANN) | A$31.20 | A$57.93 | 46.1% |
| MLG Oz (ASX:MLG) | A$0.64 | A$1.16 | 45% |
| Charter Hall Group (ASX:CHC) | A$16.21 | A$31.34 | 48.3% |
| Ingenia Communities Group (ASX:INA) | A$4.96 | A$9.40 | 47.3% |
| Millennium Services Group (ASX:MIL) | A$1.145 | A$2.24 | 48.9% |
| Little Green Pharma (ASX:LGP) | A$0.088 | A$0.17 | 48% |
| Mineral Resources (ASX:MIN) | A$49.11 | A$95.88 | 48.8% |
Below we spotlight a couple of our favorites from our exclusive screener.
Accent Group
Overview: Accent Group Limited operates in the retail, distribution, and franchise sectors for lifestyle footwear, apparel, and accessories across Australia and New Zealand with a market capitalization of A$1.38 billion.
Operations: The company's revenue is derived from its Retail segment, which generated A$1.27 billion, and its Wholesale segment, contributing A$463.20 million.
Estimated Discount To Fair Value: 49.4%
Accent Group is trading at A$2.43, significantly below its estimated fair value of A$4.81, suggesting it may be undervalued based on cash flows. Despite a forecasted revenue growth of 6.4% per year and earnings growth of 14.6%, profit margins have declined from 6.2% to 4.1%. Recent board changes and private placements indicate strategic shifts, but significant insider selling raises caution regarding internal confidence in future performance.
Mader Group
Overview: Mader Group Limited is a contracting company that offers specialist technical services in the mining, energy, and industrial sectors both in Australia and internationally, with a market cap of A$1.12 billion.
Operations: The company's revenue primarily comes from its Staffing & Outsourcing Services segment, which generated A$774.47 million.
Estimated Discount To Fair Value: 46.6%
Mader Group, trading at A$5.57, is valued below its estimated fair value of A$10.43, highlighting potential undervaluation based on cash flows. The company reported fiscal 2024 revenue of A$774.47 million and net income of A$50.42 million, with earnings expected to grow faster than the Australian market at 13.5% annually. Recent inclusion in the S&P Global BMI Index and increased dividends reflect positive momentum, yet growth forecasts remain moderate compared to significant benchmarks.