Stock Analysis

ASX Stocks That May Be Priced Below Their Value In October 2024

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The Australian market has experienced a steady climb, with a 1.1% increase in the last week and a notable 17% rise over the past year, while earnings are projected to grow by 12% annually in the coming years. In this environment, identifying stocks that may be priced 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

NameCurrent PriceFair Value (Est)Discount (Est)
Data#3 (ASX:DTL)A$7.51A$13.4644.2%
Mader Group (ASX:MAD)A$5.56A$10.4146.6%
Accent Group (ASX:AX1)A$2.46A$4.8048.7%
Ansell (ASX:ANN)A$31.06A$57.8946.3%
Charter Hall Group (ASX:CHC)A$16.56A$31.2847.1%
Ingenia Communities Group (ASX:INA)A$5.06A$9.3946.1%
Aussie Broadband (ASX:ABB)A$3.80A$6.7443.6%
Millennium Services Group (ASX:MIL)A$1.145A$2.2448.9%
Megaport (ASX:MP1)A$7.42A$13.4644.9%
Ai-Media Technologies (ASX:AIM)A$0.795A$1.4143.8%

Click here to see the full list of 43 stocks from our Undervalued ASX Stocks Based On Cash Flows screener.

Let's explore several standout options from the results in the screener.

De Grey Mining (ASX:DEG)

Overview: De Grey Mining Limited is an Australian company focused on the exploration of mineral properties, with a market cap of A$3.34 billion.

Operations: The company's revenue is primarily derived from exploration activities, amounting to A$0.04 million.

Estimated Discount To Fair Value: 41.5%

De Grey Mining is trading at A$1.37, significantly below its estimated fair value of A$2.34, indicating it may be undervalued based on cash flows. Despite making less than US$1 million in revenue, De Grey's earnings are forecast to grow nearly 60% annually and become profitable within three years. Recent developments include completing key exploration activities at the Egina Gold Project and ongoing negotiations for access agreements, which could enhance future exploration potential and cash flow prospects.

ASX:DEG Discounted Cash Flow as at Oct 2024

Hansen Technologies (ASX:HSN)

Overview: Hansen Technologies Limited develops, integrates, and supports billing systems software for the energy, utilities, communications, and media sectors with a market cap of A$991.81 million.

Operations: The company generates revenue primarily from its billing segment, amounting to A$347.61 million.

Estimated Discount To Fair Value: 39.3%

Hansen Technologies is trading at A$4.94, well below its estimated fair value of A$8.14, suggesting undervaluation based on cash flows. Despite a decline in net profit margin from 13.7% to 6%, earnings are projected to grow significantly at 20.9% annually, outpacing the broader Australian market's growth rate of 12.2%. Recent client wins with Area Nett AS and leadership changes could further impact future performance and operational efficiency positively.

ASX:HSN Discounted Cash Flow as at Oct 2024

PolyNovo (ASX:PNV)

Overview: PolyNovo Limited designs, manufactures, and sells biodegradable medical devices in the United States, Australia, New Zealand, and internationally with a market cap of A$1.62 billion.

Operations: The company's revenue is primarily derived from the development, manufacturing, and commercialization of the NovoSorb technology, amounting to A$103.23 million.

Estimated Discount To Fair Value: 24.1%

PolyNovo is trading at A$2.34, significantly below its estimated fair value of A$3.08, indicating undervaluation based on cash flows. The company recently turned profitable with a net income of A$5.26 million for the fiscal year ending June 2024, compared to a loss previously. Earnings are forecast to grow substantially at 38.3% annually, surpassing market averages, although insider selling has been noted recently which may warrant caution among investors.

ASX:PNV Discounted Cash Flow as at Oct 2024

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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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