3 TSX Stocks Estimated To Be Trading At Up To 49.5% Discount
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With inflation moving closer to target and central banks potentially easing rates, the Canadian market has seen a flurry of activity despite growth concerns. In this environment, identifying undervalued stocks can be crucial for investors looking to capitalize on market inefficiencies and potential rebounds.
Top 10 Undervalued Stocks Based On Cash Flows In Canada
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| goeasy (TSX:GSY) | CA$194.98 | CA$351.97 | 44.6% |
| Amerigo Resources (TSX:ARG) | CA$1.62 | CA$3.05 | 46.9% |
| Computer Modelling Group (TSX:CMG) | CA$12.54 | CA$22.44 | 44.1% |
| Kinaxis (TSX:KXS) | CA$151.75 | CA$286.55 | 47% |
| Viemed Healthcare (TSX:VMD) | CA$10.45 | CA$20.08 | 48% |
| Boyd Group Services (TSX:BYD) | CA$226.01 | CA$399.87 | 43.5% |
| NFI Group (TSX:NFI) | CA$19.16 | CA$37.91 | 49.5% |
| Green Thumb Industries (CNSX:GTII) | CA$15.93 | CA$30.32 | 47.5% |
| NanoXplore (TSX:GRA) | CA$2.24 | CA$4.23 | 47% |
| TerrAscend (TSX:TSND) | CA$1.84 | CA$3.22 | 42.8% |
We're going to check out a few of the best picks from our screener tool.
Computer Modelling Group
Overview: Computer Modelling Group Ltd. is a software and consulting technology company that develops and licenses reservoir simulation and seismic interpretation software, with a market cap of CA$1.09 billion.
Operations: The company's revenue segments consist of CA$20.79 million from BHV and CA$87.89 million from CMG.
Estimated Discount To Fair Value: 44.1%
Computer Modelling Group (CMG) is trading at CA$12.54, significantly below its estimated fair value of CA$22.44, indicating it may be undervalued based on discounted cash flows. Despite recent insider selling and a dip in quarterly net income to CA$3.96 million from CA$6.9 million last year, earnings are forecast to grow 15.72% annually, outpacing the Canadian market's growth rate of 14.7%.
Kinaxis
Overview: Kinaxis Inc. offers cloud-based subscription software for supply chain operations across the United States, Europe, Asia, and Canada, with a market cap of CA$4.14 billion.
Operations: The company's revenue from software and programming amounts to $457.72 million.
Estimated Discount To Fair Value: 47%
Kinaxis, currently trading at CA$151.75, is significantly undervalued with an estimated fair value of CA$286.55 based on discounted cash flows. The company reported Q2 2024 sales of US$118.28 million and net income of US$3.43 million, showing substantial improvement from the previous year’s loss. With earnings projected to grow 46.81% annually, Kinaxis is expected to outperform the Canadian market's growth rate of 14.7%.