ASX Value Picks: Duratec And 2 Other Stocks That May Be Trading Below Intrinsic Estimates

The Australian stock market has recently experienced a downturn, with the ASX 200 index slipping back into the 8,300s after reaching record highs, driven by risk-off sentiment in financials and underwhelming results from major banks. In such a fluctuating environment, identifying undervalued stocks can be crucial for investors seeking opportunities; companies like Duratec and others that may be trading below their intrinsic value offer potential for growth as market conditions stabilize.

Top 10 Undervalued Stocks Based On Cash Flows In Australia

Name	Current Price	Fair Value (Est)	Discount (Est)
Mader Group (ASX:MAD)	A$6.02	A$11.18	46.1%
IDP Education (ASX:IEL)	A$12.39	A$24.09	48.6%
Symal Group (ASX:SYL)	A$1.97	A$3.63	45.8%
Atlas Arteria (ASX:ALX)	A$5.12	A$9.06	43.5%
Audinate Group (ASX:AD8)	A$8.93	A$16.34	45.3%
Alcidion Group (ASX:ALC)	A$0.085	A$0.16	47.2%
Pantoro (ASX:PNR)	A$0.14	A$0.26	45.4%
Integral Diagnostics (ASX:IDX)	A$2.95	A$5.73	48.5%
Adriatic Metals (ASX:ADT)	A$4.27	A$8.02	46.8%
Sandfire Resources (ASX:SFR)	A$10.79	A$19.27	44%

Click here to see the full list of 47 stocks from our Undervalued ASX Stocks Based On Cash Flows screener.

Here's a peek at a few of the choices from the screener.

Duratec (ASX:DUR)

Overview: Duratec Limited, with a market cap of A$443.59 million, provides assessment, protection, remediation, and refurbishment services for steel and concrete infrastructure assets in Australia.

Operations: Duratec's revenue is primarily derived from its Defence segment at A$220.16 million, followed by Mining & Industrial at A$155.64 million, Buildings & Facades at A$111.33 million, and Energy at A$46.64 million.

Estimated Discount To Fair Value: 21.4%

Duratec's current trading price of A$1.71 is significantly below its estimated fair value of A$2.18, suggesting it may be undervalued based on cash flows. Earnings are forecast to grow at 14% annually, outpacing the Australian market average of 11.4%, while revenue growth is expected at 8.4% per year. Recent guidance indicates full-year revenue between A$600 million and A$640 million, reinforcing positive cash flow prospects despite moderate growth expectations compared to historical performance.

• In light of our recent growth report, it seems possible that Duratec's financial performance will exceed current levels.
• Unlock comprehensive insights into our analysis of Duratec stock in this financial health report.

Mader Group (ASX:MAD)

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$1.24 billion.

Operations: The company's revenue is primarily derived from its Staffing & Outsourcing Services segment, which generated A$774.47 million.

Estimated Discount To Fair Value: 46.1%

Mader Group is trading at A$6.02, significantly below its estimated fair value of A$11.18, highlighting potential undervaluation based on cash flows. With earnings growth of 30.9% last year and a forecasted annual increase of 15.1%, it surpasses the Australian market's average growth rate of 11.4%. Revenue is expected to grow by 12.5% annually, supporting robust cash flow prospects despite not reaching significant levels above 20%.

• Our growth report here indicates Mader Group may be poised for an improving outlook.
• Click to explore a detailed breakdown of our findings in Mader Group's balance sheet health report.

Regal Partners (ASX:RPL)

Overview: Regal Partners Limited is a privately owned hedge fund sponsor with a market cap of A$1.33 billion.

Operations: The company generates revenue primarily from the provision of investment management services, amounting to A$198.50 million.

Estimated Discount To Fair Value: 34.7%

Regal Partners, trading at A$3.98, is significantly below its estimated fair value of A$6.09, suggesting undervaluation based on cash flows. Despite substantial shareholder dilution last year, earnings grew by a very large amount and are expected to continue growing at 23.64% annually over the next three years, outpacing the Australian market's average growth rate of 11.4%. However, its dividend yield of 4.02% isn't well covered by free cash flows.

• Upon reviewing our latest growth report, Regal Partners' projected financial performance appears quite optimistic.
• Click here and access our complete balance sheet health report to understand the dynamics of Regal Partners.

Key Takeaways

• Embark on your investment journey to our 47 Undervalued ASX Stocks Based On Cash Flows selection here.
• Are you invested in these stocks already? Keep abreast of every twist and turn by setting up a portfolio with Simply Wall St, where we make it simple for investors like you to stay informed and proactive.
• Streamline your investment strategy with Simply Wall St's app for free and benefit from extensive research on stocks across all corners of the world.

Seeking Other Investments?

• Explore high-performing small cap companies that haven't yet garnered significant analyst attention.
• Diversify your portfolio with solid dividend payers offering reliable income streams to weather potential market turbulence.
• Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com