ASX Stocks Estimated To Be Below Intrinsic Value In October 2024
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The Australian market has experienced a flat performance over the last week, yet it boasts an impressive 17% increase over the past year, with earnings projected to grow by 12% annually. In such an environment, identifying stocks that are estimated to be trading below their intrinsic value can offer potential opportunities for investors looking to capitalize on future growth prospects.
Top 10 Undervalued Stocks Based On Cash Flows In Australia
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| Mader Group (ASX:MAD) | A$5.60 | A$10.42 | 46.3% |
| MLG Oz (ASX:MLG) | A$0.63 | A$1.15 | 45.3% |
| Charter Hall Group (ASX:CHC) | A$15.79 | A$31.43 | 49.8% |
| Ingenia Communities Group (ASX:INA) | A$4.93 | A$9.41 | 47.6% |
| Treasury Wine Estates (ASX:TWE) | A$12.29 | A$24.19 | 49.2% |
| Millennium Services Group (ASX:MIL) | A$1.145 | A$2.24 | 48.9% |
| IDP Education (ASX:IEL) | A$14.79 | A$27.65 | 46.5% |
| Ai-Media Technologies (ASX:AIM) | A$0.76 | A$1.42 | 46.3% |
| Superloop (ASX:SLC) | A$1.715 | A$3.31 | 48.2% |
| Mineral Resources (ASX:MIN) | A$50.67 | A$95.49 | 46.9% |
We're going to check out a few of the best picks from our screener tool.
Infomedia
Overview: Infomedia Ltd is a technology company that develops and supplies electronic parts catalogues, service quoting software, and e-commerce solutions for the automotive industry worldwide, with a market cap of A$579.00 million.
Operations: The company's revenue segment includes Publishing - Periodicals, generating A$140.83 million.
Estimated Discount To Fair Value: 35.9%
Infomedia is trading at A$1.55, significantly below its estimated fair value of A$2.41, indicating it may be undervalued based on cash flows. Despite large one-off items impacting financial results, earnings grew by 32.4% last year and are expected to grow significantly over the next three years at 22% annually, outpacing the Australian market's growth rate of 12.2%. However, its dividend yield of 2.72% is not well covered by earnings.
Nanosonics
Overview: Nanosonics Limited is a global infection prevention company with a market cap of A$1.12 billion.
Operations: The company's revenue is derived from its Healthcare Equipment segment, which generated A$170.01 million.
Estimated Discount To Fair Value: 27.5%
Nanosonics is trading at A$3.69, below its estimated fair value of A$5.09, suggesting potential undervaluation based on cash flows. Despite a recent drop from the S&P/ASX 200 Index and declining profit margins from 12% to 7.6%, earnings are forecasted to grow significantly at 23.6% annually over the next three years, surpassing the Australian market's growth rate of 12.2%. However, revenue growth remains modest at an expected annual rate of 8.7%.