As Canadian markets navigate potential rate cuts from the Bank of Canada and the Federal Reserve, investors are keenly observing how these monetary policy shifts might impact economic stability and market volatility. With major indices near record highs and certain sectors facing challenges, identifying undervalued stocks can offer a strategic opportunity to capitalize on potential price corrections.
Top 10 Undervalued Stocks Based On Cash Flows In Canada
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| Vitalhub (TSX:VHI) | CA$11.04 | CA$20.62 | 46.5% |
| TerraVest Industries (TSX:TVK) | CA$137.71 | CA$266.37 | 48.3% |
| Magellan Aerospace (TSX:MAL) | CA$16.45 | CA$28.39 | 42.1% |
| K92 Mining (TSX:KNT) | CA$15.60 | CA$27.70 | 43.7% |
| Haivision Systems (TSX:HAI) | CA$5.03 | CA$9.41 | 46.5% |
| goeasy (TSX:GSY) | CA$208.48 | CA$377.40 | 44.8% |
| First Majestic Silver (TSX:AG) | CA$14.28 | CA$25.79 | 44.6% |
| Discovery Silver (TSX:DSV) | CA$4.88 | CA$8.04 | 39.3% |
| CareRx (TSX:CRRX) | CA$3.30 | CA$6.29 | 47.5% |
| BRP (TSX:DOO) | CA$89.47 | CA$161.70 | 44.7% |
We're going to check out a few of the best picks from our screener tool.
DPM Metals (TSX:DPM)
Overview: DPM Metals Inc. is a gold mining company involved in the acquisition, exploration, development, mining, and processing of precious metals with a market cap of CA$4.93 billion.
Operations: The company's revenue is derived from its operations at Ada Tepe, contributing $198.55 million, and Chelopech, generating $458.45 million.
Estimated Discount To Fair Value: 34.3%
DPM Metals, trading at CA$29.2, is significantly undervalued compared to its estimated fair value of CA$44.47. The company has demonstrated robust earnings growth of 14.1% annually over the past five years and is forecasted to continue growing at 12.65% per year, outpacing the Canadian market's average growth rate. Recent exploration success in Serbia supports potential future revenue increases, while a strong return on equity forecast of 26.9% enhances its investment appeal based on cash flows.
- According our earnings growth report, there's an indication that DPM Metals might be ready to expand.
- Dive into the specifics of DPM Metals here with our thorough financial health report.
TerraVest Industries (TSX:TVK)
Overview: TerraVest Industries Inc. is a company that manufactures and sells goods and services across various sectors including agriculture, mining, energy, and more in Canada, the United States, and internationally with a market cap of approximately CA$3 billion.
Operations: TerraVest Industries Inc. generates revenue through its segments, including Service (CA$221.65 million), Processing Equipment (CA$103.10 million), Compressed Gas Equipment (CA$482.68 million), and HVAC and Containment Equipment (CA$380.50 million).
Estimated Discount To Fair Value: 48.3%
TerraVest Industries is trading at CA$137.71, significantly undervalued against its fair value estimate of CA$266.37, with earnings forecasted to grow substantially at 22.1% annually over the next three years. Despite recent insider selling and debt not well covered by operating cash flow, the company has initiated a share buyback program for up to 7.19% of its shares and reported strong revenue growth from CAD 681 million to CAD 951 million year-over-year for nine months ending June 2025.
- In light of our recent growth report, it seems possible that TerraVest Industries' financial performance will exceed current levels.
- Click here and access our complete balance sheet health report to understand the dynamics of TerraVest Industries.
Versamet Royalties (TSXV:VMET)
Overview: Versamet Royalties Corporation is a metals royalty and streaming company that acquires and manages royalties, streams, and similar interests in mining operations and projects across Peru, Africa, and Canada with a market cap of CA$738.54 million.
Operations: The company's revenue segments include $2.08 million from Mercedes in Mexico and $11.78 million from Greenstone in Canada.
Estimated Discount To Fair Value: 38.9%
Versamet Royalties is trading at CA$8.5, significantly undervalued with a fair value estimate of CA$13.9, and its revenue growth is projected to outpace the Canadian market at 30.3% annually. The company recently completed a 1:5 stock split and filed a CAD 400 million shelf registration, indicating potential capital raising efforts. Despite limited financial data availability, Versamet's earnings are expected to grow substantially by 43.24% per year as it aims for profitability within three years.
- The growth report we've compiled suggests that Versamet Royalties' future prospects could be on the up.
- Unlock comprehensive insights into our analysis of Versamet Royalties stock in this financial health report.
Where To Now?
- Unlock our comprehensive list of 27 Undervalued TSX Stocks Based On Cash Flows by clicking here.
- Shareholder in one or more of these companies? Ensure you're never caught off-guard by adding your portfolio in Simply Wall St for timely alerts on significant stock developments.
- Elevate your portfolio with Simply Wall St, the ultimate app for investors seeking global market coverage.
Want To Explore Some Alternatives?
- 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.
Valuation is complex, but we're here to simplify it.
Discover if DPM Metals might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
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