September 2024's TSX Stocks Estimated To Be Trading Below Fair Value

The Canadian market has shown robust performance, rising 1.1% in the past week and 20% over the last year, with earnings projected to grow by 15% annually in the coming years. In this thriving environment, identifying stocks trading below their fair value can offer significant opportunities for investors looking to capitalize on potential growth.

Top 10 Undervalued Stocks Based On Cash Flows In Canada

Name	Current Price	Fair Value (Est)	Discount (Est)
Computer Modelling Group (TSX:CMG)	CA$11.60	CA$22.09	47.5%
Savaria (TSX:SIS)	CA$20.86	CA$41.21	49.4%
Kinaxis (TSX:KXS)	CA$154.32	CA$278.56	44.6%
Africa Oil (TSX:AOI)	CA$1.85	CA$3.67	49.6%
Viemed Healthcare (TSX:VMD)	CA$10.45	CA$20.08	48%
Endeavour Mining (TSX:EDV)	CA$33.48	CA$55.42	39.6%
Saturn Oil & Gas (TSX:SOIL)	CA$2.50	CA$4.92	49.2%
Blackline Safety (TSX:BLN)	CA$5.75	CA$11.04	47.9%
NFI Group (TSX:NFI)	CA$18.75	CA$37.18	49.6%
Boyd Group Services (TSX:BYD)	CA$207.19	CA$334.80	38.1%

Click here to see the full list of 29 stocks from our Undervalued TSX Stocks Based On Cash Flows screener.

Let's take a closer look at a couple of our picks from the screened companies.

Africa Oil (TSX:AOI)

Overview: Africa Oil Corp., with a market cap of CA$797.43 million, operates as an oil and gas exploration and production company in Kenya, Nigeria, and South Africa.

Operations: The company's revenue segments include oil and gas exploration and production activities in Kenya, Nigeria, and South Africa.

Estimated Discount To Fair Value: 49.6%

Africa Oil Corp. (TSX:AOI) appears undervalued based on cash flows, trading at 49.6% below its estimated fair value of CA$3.67 per share. Despite recent index exclusions and a significant drop in revenue from US$178 million to US$9.7 million year-over-year for Q2 2024, the company remains focused on profitability with forecasts indicating a 54.23% annual earnings growth and revenue expected to grow faster than the Canadian market at 45.1% per year.

• Insights from our recent growth report point to a promising forecast for Africa Oil's business outlook.
• Dive into the specifics of Africa Oil here with our thorough financial health report.

Constellation Software (TSX:CSU)

Overview: Constellation Software Inc., with a market cap of CA$93.24 billion, acquires, builds, and manages vertical market software businesses in Canada, the United States, Europe, and internationally.

Operations: Constellation Software generates revenue primarily from its Software & Programming segment, amounting to $9.27 billion.

Estimated Discount To Fair Value: 19.6%

Constellation Software's recent earnings report shows strong financial performance with significant revenue and net income growth. The company reported Q2 2024 revenue of US$2.47 billion, up from US$2.04 billion a year ago, and net income of US$177 million compared to US$103 million last year. Trading at 19.6% below its estimated fair value (CA$5488.29), it appears undervalued based on cash flows despite high debt levels and substantial insider selling over the past quarter.

• According our earnings growth report, there's an indication that Constellation Software might be ready to expand.
• Click to explore a detailed breakdown of our findings in Constellation Software's balance sheet health report.

Saturn Oil & Gas (TSX:SOIL)

Overview: Saturn Oil & Gas Inc. is involved in the acquisition, exploration, and development of petroleum and natural gas resource deposits in Canada, with a market cap of CA$493.72 million.

Operations: Saturn Oil & Gas generates revenue primarily from the acquisition and exploration of resource properties, amounting to CA$680.72 million.

Estimated Discount To Fair Value: 49.2%

Saturn Oil & Gas appears undervalued based on cash flows, trading at CA$2.5, which is 49.2% below its estimated fair value of CA$4.92. Despite recent dilution and a net loss for the first half of 2024, the company forecasts over CA$200 million in excess free cash flow for the next year, aimed at debt reduction and strategic acquisitions. Recent buyback announcements reflect strong cash flow management and potential shareholder returns strategies.

• The analysis detailed in our Saturn Oil & Gas growth report hints at robust future financial performance.
• Get an in-depth perspective on Saturn Oil & Gas' balance sheet by reading our health report here.

Summing It All Up

• Gain an insight into the universe of 29 Undervalued TSX Stocks Based On Cash Flows by clicking here.
• Are any of these part of your asset mix? Tap into the analytical power of Simply Wall St's portfolio to get a 360-degree view on how they're shaping up.
• Take control of your financial future using Simply Wall St, offering free, in-depth knowledge of international markets to every investor.

Ready To Venture Into Other Investment Styles?

• 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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