ASX Stocks Estimated To Be Undervalued In September 2024
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Over the last 7 days, the Australian market has risen 1.7%, driven by gains of 4.5% in one sector, and is up 12% over the last 12 months. In this context of strong performance and anticipated earnings growth of 12% per annum over the next few years, identifying undervalued stocks can be a strategic move for investors looking to capitalize on potential market opportunities.
Top 10 Undervalued Stocks Based On Cash Flows In Australia
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| Hansen Technologies (ASX:HSN) | A$4.30 | A$8.20 | 47.5% |
| Duratec (ASX:DUR) | A$1.40 | A$2.60 | 46.2% |
| Genesis Minerals (ASX:GMD) | A$2.10 | A$4.00 | 47.5% |
| Charter Hall Group (ASX:CHC) | A$16.05 | A$29.32 | 45.3% |
| Megaport (ASX:MP1) | A$7.45 | A$13.57 | 45.1% |
| Little Green Pharma (ASX:LGP) | A$0.085 | A$0.17 | 49.8% |
| Millennium Services Group (ASX:MIL) | A$1.145 | A$2.24 | 48.9% |
| Clover (ASX:CLV) | A$0.375 | A$0.72 | 47.9% |
| Ai-Media Technologies (ASX:AIM) | A$0.74 | A$1.42 | 47.8% |
| Superloop (ASX:SLC) | A$1.765 | A$3.31 | 46.7% |
Here we highlight a subset of our preferred stocks from the screener.
Life360
Overview: Life360, Inc. operates a technology platform to locate people, pets, and things across North America, Europe, the Middle East, Africa, and internationally with a market cap of A$3.76 billion.
Operations: The company generates revenue primarily from its Software & Programming segment, which amounted to $328.68 million.
Estimated Discount To Fair Value: 41.1%
Life360, trading at A$16.87, is significantly undervalued based on its discounted cash flow analysis with an estimated fair value of A$28.62. Despite recent insider selling and shareholder dilution, the company is expected to become profitable within three years and has a forecasted revenue growth rate of 15.7% per year, outpacing the Australian market average. Recent product innovations like the new Tile Bluetooth trackers could enhance revenue streams further and align with Life360's vision for family safety and connectivity.
Data#3
Overview: Data#3 Limited provides IT solutions and services across Australia, Fiji, and the Pacific Islands with a market cap of A$1.18 billion.
Operations: Revenue from the Value-Added IT Reseller and IT Solutions Provider segment amounts to A$805.75 million.
Estimated Discount To Fair Value: 43.8%
Data#3, trading at A$7.62, is undervalued with a fair value estimate of A$13.56 and trades 43.8% below this estimate. Despite slower earnings growth (11%) compared to the market (12.3%), its revenue is expected to grow significantly at 34.1% annually, outpacing the market's 5.3%. Recent financials show net income rose from A$37 million to A$43 million year-over-year, although dividends remain poorly covered by earnings or free cash flows.