Stock Analysis
3 ASX Stocks Estimated To Be Up To 32% Below Intrinsic Value
Reviewed by Simply Wall St
The Australian stock market has recently experienced a mixed performance, with the ASX200 closing slightly down amidst sector-specific fluctuations and notable corporate developments. While discretionary stocks have shown resilience, sectors such as real estate and utilities faced downward pressure, highlighting the importance of identifying undervalued opportunities in a volatile environment. In this context, finding stocks that are estimated to be trading below their intrinsic value can offer potential for growth despite broader market uncertainties.
Top 10 Undervalued Stocks Based On Cash Flows In Australia
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| Data#3 (ASX:DTL) | A$6.90 | A$12.32 | 44% |
| SKS Technologies Group (ASX:SKS) | A$2.15 | A$3.83 | 43.9% |
| Mader Group (ASX:MAD) | A$6.06 | A$11.90 | 49.1% |
| Atlas Arteria (ASX:ALX) | A$4.93 | A$9.55 | 48.4% |
| MLG Oz (ASX:MLG) | A$0.595 | A$1.17 | 49% |
| Charter Hall Group (ASX:CHC) | A$15.17 | A$28.66 | 47.1% |
| ReadyTech Holdings (ASX:RDY) | A$3.15 | A$6.21 | 49.2% |
| Gold Road Resources (ASX:GOR) | A$2.40 | A$4.65 | 48.4% |
| Syrah Resources (ASX:SYR) | A$0.225 | A$0.43 | 47.2% |
| Vault Minerals (ASX:VAU) | A$0.36 | A$0.68 | 46.9% |
Below we spotlight a couple of our favorites from our exclusive screener.
Flight Centre Travel Group (ASX:FLT)
Overview: Flight Centre Travel Group Limited offers travel retailing services for both leisure and corporate clients across various regions including Australia, New Zealand, the Americas, Europe, the Middle East, Africa, Asia, and beyond with a market cap of A$3.72 billion.
Operations: The company's revenue segments consist of A$1.35 billion from leisure travel services and A$1.11 billion from corporate travel services.
Estimated Discount To Fair Value: 32%
Flight Centre Travel Group is trading at A$17.57, significantly below its estimated fair value of A$25.82, representing a substantial undervaluation based on discounted cash flow analysis. The company has seen earnings grow by 194.2% over the past year and is forecast to achieve annual earnings growth of 19%, outpacing the Australian market's 12.6%. However, it faces challenges with an unstable dividend track record and slower revenue growth at 7.2% annually compared to higher benchmarks.
- The analysis detailed in our Flight Centre Travel Group growth report hints at robust future financial performance.
- Navigate through the intricacies of Flight Centre Travel Group with our comprehensive financial health report here.
SEEK (ASX:SEK)
Overview: SEEK Limited operates an online employment marketplace serving Australia, South East Asia, New Zealand, the United Kingdom, Europe, and other international markets with a market cap of A$7.79 billion.
Operations: The company's revenue segments include Employment Marketplaces in ANZ generating A$840.10 million and Employment Marketplaces in Asia contributing A$244 million.
Estimated Discount To Fair Value: 15.8%
SEEK, currently priced at A$22.16, trades below its estimated fair value of A$26.31, indicating a modest undervaluation based on discounted cash flow analysis. The company is expected to see earnings grow significantly at 37.92% annually and become profitable within three years, surpassing average market growth rates. However, its forecasted return on equity remains low at 10.4%, which may temper investor enthusiasm despite the positive revenue outlook of 7.9% annually.
- Our earnings growth report unveils the potential for significant increases in SEEK's future results.
- Delve into the full analysis health report here for a deeper understanding of SEEK.
Viva Energy Group (ASX:VEA)
Overview: Viva Energy Group Limited is an energy company operating in Australia, Singapore, and Papua New Guinea with a market cap of A$4.34 billion.
Operations: The company's revenue is primarily derived from three segments: Convenience & Mobility (A$11.43 billion), Commercial & Industrial (A$16.97 billion), and Energy & Infrastructure (A$7.92 billion).
Estimated Discount To Fair Value: 16.1%
Viva Energy Group, priced at A$2.63, trades below its estimated fair value of A$3.14, suggesting it is undervalued based on cash flow analysis. Despite interest payments not being well covered by earnings and a dividend yield of 5.1% that isn't sustainable from current profits, the company shows promising earnings growth potential at 24% annually over the next three years, outpacing the Australian market's average growth rate of 12.6%.
- According our earnings growth report, there's an indication that Viva Energy Group might be ready to expand.
- Click here to discover the nuances of Viva Energy Group with our detailed financial health report.
Make It Happen
- Investigate our full lineup of 45 Undervalued ASX Stocks Based On Cash Flows right here.
- Already own these companies? Link your portfolio to Simply Wall St and get alerts on any new warning signs to your stocks.
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Looking For Alternative Opportunities?
- 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.
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About ASX:SEK
SEEK
Engages in the provision of online employment marketplace services in Australia, South East Asia, New Zealand, the United Kingdom, Europe, and internationally.
