3 ASX Stocks Estimated To Be Trading Up To 43.5% Below Intrinsic Value

The Australian stock market has recently shown resilience, with the ASX200 closing up 0.28% at 8,417 points and reaching a new all-time high during intra-day trading. Amidst this robust performance, identifying undervalued stocks becomes crucial for investors looking to capitalize on potential growth opportunities in sectors like Real Estate and Health Care, which have been leading the charge.

Top 10 Undervalued Stocks Based On Cash Flows In Australia

Name	Current Price	Fair Value (Est)	Discount (Est)
SKS Technologies Group (ASX:SKS)	A$2.04	A$3.88	47.4%
Telix Pharmaceuticals (ASX:TLX)	A$22.76	A$44.05	48.3%
Atlas Arteria (ASX:ALX)	A$4.88	A$9.45	48.4%
MLG Oz (ASX:MLG)	A$0.61	A$1.13	46.2%
Ingenia Communities Group (ASX:INA)	A$5.14	A$9.32	44.9%
Millennium Services Group (ASX:MIL)	A$1.145	A$2.24	48.9%
Genesis Minerals (ASX:GMD)	A$2.48	A$4.74	47.7%
Vault Minerals (ASX:VAU)	A$0.34	A$0.64	47.1%
Ai-Media Technologies (ASX:AIM)	A$0.735	A$1.40	47.4%
FINEOS Corporation Holdings (ASX:FCL)	A$1.955	A$3.74	47.7%

Click here to see the full list of 40 stocks from our Undervalued ASX Stocks Based On Cash Flows screener.

Here we highlight a subset of our preferred stocks from the screener.

Ansell (ASX:ANN)

Overview: Ansell Limited is a company that designs, sources, develops, manufactures, distributes, and sells hand and body protection solutions across various regions including the Asia Pacific, Europe, the Middle East, Africa, Latin America, the Caribbean, and North America with a market cap of A$4.69 billion.

Operations: The company's revenue segments are comprised of $834.20 million from Healthcare and $785.10 million from Industrial, including Specialty Markets.

Estimated Discount To Fair Value: 43.5%

Ansell is trading at A$32.71, significantly below its estimated fair value of A$57.84, suggesting it may be undervalued based on discounted cash flow analysis. Despite a profit margin decline from 9% to 4.7% and recent shareholder dilution, earnings are expected to grow significantly at 22.8% annually over the next three years, outpacing both revenue growth and the broader Australian market's earnings growth rate of 12.4%.

• Upon reviewing our latest growth report, Ansell's projected financial performance appears quite optimistic.
• Dive into the specifics of Ansell here with our thorough financial health report.

Lovisa Holdings (ASX:LOV)

Overview: Lovisa Holdings Limited operates in the retail sector, focusing on the sale of fashion jewelry and accessories, with a market capitalization of A$3.01 billion.

Operations: The company's revenue is derived entirely from its retail sale of fashion jewelry and accessories, amounting to A$698.66 million.

Estimated Discount To Fair Value: 10.9%

Lovisa Holdings is trading at A$27.85, below its estimated fair value of A$31.25, indicating potential undervaluation based on cash flows. The company's revenue and earnings are forecast to grow faster than the Australian market, with earnings expected to increase by 15.17% annually. Despite this growth trajectory, the dividend yield of 3.12% is not well covered by earnings, which may pose a risk for income-focused investors seeking sustainable payouts.

• In light of our recent growth report, it seems possible that Lovisa Holdings' financial performance will exceed current levels.
• Click to explore a detailed breakdown of our findings in Lovisa Holdings' balance sheet health report.

Technology One (ASX:TNE)

Overview: Technology One Limited develops, markets, sells, implements, and supports integrated enterprise business software solutions both in Australia and internationally with a market cap of A$9.94 billion.

Operations: The company's revenue segments include Software at A$347.35 million, Corporate at A$87.02 million, and Consulting at A$72.17 million.

Estimated Discount To Fair Value: 32.4%

Technology One, trading at A$30.43, is significantly undervalued based on cash flows with an estimated fair value of A$45. Earnings are projected to grow annually by 16.1%, outpacing the Australian market's growth rate of 12.4%. Revenue grew from A$429.38 million to A$506.54 million year-over-year, reflecting robust performance despite earnings growth not being classified as significant. The company also announced a dividend increase for the period ending September 2024, enhancing shareholder returns.

• According our earnings growth report, there's an indication that Technology One might be ready to expand.
• Take a closer look at Technology One's balance sheet health here in our report.

Key Takeaways

• Reveal the 40 hidden gems among our Undervalued ASX Stocks Based On Cash Flows screener with a single click here.
• Have a stake in these businesses? Integrate your holdings into Simply Wall St's portfolio for notifications and detailed stock reports.
• Invest smarter with the free Simply Wall St app providing detailed insights into every stock market around the globe.

Curious About Other Options?

• 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