ASX Value Stocks Including Austal That May Be Priced Below Intrinsic Estimates

The Australian market has shown resilience with the ASX200 trading higher, buoyed by strong performances in the Discretionary, Real Estate, and IT sectors. In such an environment of positive investor sentiment, identifying undervalued stocks like Austal can present opportunities for those looking to invest in companies that may be priced below their intrinsic value.

Top 10 Undervalued Stocks Based On Cash Flows In Australia

Name	Current Price	Fair Value (Est)	Discount (Est)
Vysarn (ASX:VYS)	A$0.53	A$0.99	46.4%
Superloop (ASX:SLC)	A$3.31	A$6.54	49.4%
PointsBet Holdings (ASX:PBH)	A$1.22	A$2.13	42.6%
Medical Developments International (ASX:MVP)	A$0.645	A$1.09	40.7%
Hillgrove Resources (ASX:HGO)	A$0.037	A$0.073	49.5%
Fenix Resources (ASX:FEX)	A$0.31	A$0.51	39.2%
Collins Foods (ASX:CKF)	A$9.18	A$16.01	42.7%
Charter Hall Group (ASX:CHC)	A$20.36	A$36.21	43.8%
Austal (ASX:ASB)	A$6.93	A$13.11	47.1%
Advanced Braking Technology (ASX:ABV)	A$0.0925	A$0.17	44%

Click here to see the full list of 33 stocks from our Undervalued ASX Stocks Based On Cash Flows screener.

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

Austal (ASX:ASB)

Overview: Austal Limited designs, manufactures, and supports vessels for commercial and defense customers globally, with a market cap of A$2.91 billion.

Operations: Austal Limited's revenue is derived from several segments, including USA - Support (A$310.21 million), USA - Shipbuilding (A$916.49 million), Australasia - Support (A$156.69 million), and Australasia - Shipbuilding (A$197.62 million).

Estimated Discount To Fair Value: 47.1%

Austal is trading at A$6.93, significantly below its estimated fair value of A$13.11, suggesting it is undervalued based on discounted cash flow analysis. Despite recent shareholder dilution, Austal's earnings are forecast to grow substantially at 27.1% annually, outpacing the Australian market average. Recent inclusion in the S&P/ASX 200 Index and potential increased stake by Hanwha Corporation highlight investor interest. However, a low forecasted return on equity and large one-off items impacting results warrant caution.

• Our earnings growth report unveils the potential for significant increases in Austal's future results.
• Dive into the specifics of Austal here with our thorough financial health report.

Charter Hall Group (ASX:CHC)

Overview: Charter Hall Group (ASX:CHC) is Australia's leading fully integrated diversified property investment and funds management group, with a market cap of A$9.63 billion.

Operations: The company's revenue is derived from Funds Management (A$441.60 million), Property Investments (A$332.50 million), and Development Investments (A$45.30 million).

Estimated Discount To Fair Value: 43.8%

Charter Hall Group, trading at A$20.36, is significantly undervalued with an estimated fair value of A$36.21, making it an attractive option based on discounted cash flow analysis. The company is expected to become profitable within three years, with earnings forecasted to grow by 25.11% annually—outpacing the Australian market's average revenue growth of 5.5%. However, its return on equity is projected to remain modest at 14.6% in three years.

• Upon reviewing our latest growth report, Charter Hall Group's projected financial performance appears quite optimistic.
• Get an in-depth perspective on Charter Hall Group's balance sheet by reading our health report here.

Infomedia (ASX:IFM)

Overview: Infomedia Ltd is a technology company that develops and supplies electronic parts catalogues, service quoting software, and e-commerce solutions for the automotive industry worldwide, with a market cap of A$498.16 million.

Operations: Infomedia Ltd generates revenue from its Publishing - Periodicals segment, amounting to A$142.41 million.

Estimated Discount To Fair Value: 36.9%

Infomedia, trading at A$1.32, is undervalued with a fair value estimate of A$2.09, offering potential upside based on discounted cash flow analysis. Earnings are anticipated to grow at 19.9% annually, surpassing the Australian market's 10.9%. Despite recent executive changes, analysts expect a stock price increase of 36.3%. However, revenue growth is modest at 6.9% per year and dividend coverage remains weak amidst large one-off items impacting results.

• The growth report we've compiled suggests that Infomedia's future prospects could be on the up.
• Click here to discover the nuances of Infomedia with our detailed financial health report.

Make It Happen

• Investigate our full lineup of 33 Undervalued ASX Stocks Based On Cash Flows right here.
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Ready To Venture Into Other Investment Styles?

• Explore high-performing small cap companies that haven't yet garnered significant analyst attention.
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• 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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