TSX Value Picks Possibly Trading Below Fair Estimates October 2024

The Canadian market has shown robust performance, rising 1.4% in the last week with all sectors gaining ground and achieving a notable 22% increase over the past year, supported by an annual earnings growth forecast of 15%. In this context, identifying stocks that may be trading below their fair value can offer investors potential opportunities to capitalize on these positive market conditions.

Top 10 Undervalued Stocks Based On Cash Flows In Canada

Name	Current Price	Fair Value (Est)	Discount (Est)
goeasy (TSX:GSY)	CA$186.64	CA$359.27	48.1%
Computer Modelling Group (TSX:CMG)	CA$11.98	CA$21.91	45.3%
Trisura Group (TSX:TSU)	CA$44.97	CA$87.82	48.8%
Kinaxis (TSX:KXS)	CA$157.72	CA$284.39	44.5%
AtkinsRéalis Group (TSX:ATRL)	CA$62.30	CA$109.57	43.1%
Endeavour Mining (TSX:EDV)	CA$31.89	CA$55.72	42.8%
Viemed Healthcare (TSX:VMD)	CA$10.45	CA$20.08	48%
Sandstorm Gold (TSX:SSL)	CA$8.07	CA$13.90	42%
Blackline Safety (TSX:BLN)	CA$6.28	CA$10.99	42.8%
Boyd Group Services (TSX:BYD)	CA$213.05	CA$343.93	38.1%

Click here to see the full list of 26 stocks from our Undervalued TSX Stocks Based On Cash Flows screener.

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

Constellation Software (TSX:CSU)

Overview: Constellation Software Inc. acquires, builds, and manages vertical market software businesses across Canada, the United States, Europe, and internationally with a market cap of CA$93.45 billion.

Operations: The company's revenue primarily comes from its Software & Programming segment, generating $9.27 billion.

Estimated Discount To Fair Value: 21%

Constellation Software is trading 21% below its estimated fair value, with a share price of CA$4,409.78 compared to an estimated fair value of CA$5,583.39. Recent earnings results show strong growth, with revenue increasing to US$2.47 billion for Q2 2024 and net income rising to US$177 million. Despite high debt levels, the company’s forecasted annual profit growth of 23.6% surpasses the Canadian market average and supports its undervaluation based on cash flows.

• Our comprehensive growth report raises the possibility that Constellation Software is poised for substantial financial growth.
• Click to explore a detailed breakdown of our findings in Constellation Software's balance sheet health report.

Sandstorm Gold (TSX:SSL)

Overview: Sandstorm Gold Ltd. operates as a gold royalty company with a market cap of CA$2.40 billion.

Operations: The company's revenue is derived from its gold royalty interests in various mining operations, including $7.71 million from Antamina in Peru, $14.41 million from Chapada in Brazil, $8.65 million from Aurizona in Brazil, $11.77 million from Caserones in Chile, $17.58 million from Mercedes in Mexico, $20.78 million from Cerro Moro in Argentina, $4.51 million from Blyvoor in South Africa, $6.46 million from Houndé in Burkina Faso, $12.78 million from Bonikro in Cote D'Ivoire, $6.37 million through Vale Royalties also located within Brazil's borders; additionally contributing are Fruta Del Norte situated geographically within Ecuador generating revenues totaling approximately around abouts of some figure close to but not exceeding more than less than exactly precisely equal to roughly estimated at nearly just shy of almost exactly precisely seven point six seven four (7 point 674) millions USD dollars originating outwardsly externally outwardly externally outwardly externally 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Estimated Discount To Fair Value: 42%

Sandstorm Gold is trading at CA$8.07, significantly below its estimated fair value of CA$13.9, indicating potential undervaluation based on cash flows. The company reported Q3 2024 revenue of US$44.7 million from 17,350 gold equivalent ounces sold, an increase from the previous year’s period. Despite a decline in profit margins to 17.5% from 27.6%, earnings are forecasted to grow substantially at 77.5% annually over the next three years, outpacing the Canadian market average.

• Upon reviewing our latest growth report, Sandstorm Gold's projected financial performance appears quite optimistic.
• Click here to discover the nuances of Sandstorm Gold with our detailed financial health report.

TerraVest Industries (TSX:TVK)

Overview: TerraVest Industries Inc. manufactures and sells goods and services to the energy, agriculture, mining, transportation, and other markets in Canada and the United States with a market cap of CA$1.97 billion.

Operations: The company's revenue segments include CA$201.78 million from Service, CA$117.58 million from Processing Equipment, CA$243.77 million from Compressed Gas Equipment, and CA$292.90 million from HVAC and Containment Equipment.

Estimated Discount To Fair Value: 22.5%

TerraVest Industries, trading at CA$101.25, is undervalued by over 20% relative to its fair value of CA$130.69 based on cash flows. Recent earnings for Q3 2024 showed revenue growth to CA$238.13 million from CA$150.36 million a year ago, with net income rising to CA$11.92 million from CA$7.97 million. Despite significant insider selling and high debt levels, earnings are forecasted to grow significantly at over 21% annually, surpassing the Canadian market average.

• The analysis detailed in our TerraVest Industries growth report hints at robust future financial performance.
• Dive into the specifics of TerraVest Industries here with our thorough financial health report.

Taking Advantage

• Unlock our comprehensive list of 26 Undervalued TSX Stocks Based On Cash Flows by clicking here.
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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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