As the Canadian market navigates through a landscape of manageable yet unresolved inflation and potential rate cuts from the U.S. Federal Reserve, investors are keenly observing how these factors might influence equity valuations. In this environment, identifying undervalued stocks becomes crucial as they may offer attractive opportunities for growth when broader market conditions stabilize.
Top 10 Undervalued Stocks Based On Cash Flows In Canada
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| West Fraser Timber (TSX:WFG) | CA$102.72 | CA$172.43 | 40.4% |
| Trigon Metals (TSXV:TM) | CA$0.275 | CA$0.53 | 47.7% |
| TerraVest Industries (TSX:TVK) | CA$138.96 | CA$273.77 | 49.2% |
| Savaria (TSX:SIS) | CA$21.22 | CA$42.12 | 49.6% |
| Magellan Aerospace (TSX:MAL) | CA$15.49 | CA$28.55 | 45.7% |
| K92 Mining (TSX:KNT) | CA$15.16 | CA$27.88 | 45.6% |
| Ivanhoe Mines (TSX:IVN) | CA$11.51 | CA$19.97 | 42.4% |
| Groupe Dynamite (TSX:GRGD) | CA$39.57 | CA$70.82 | 44.1% |
| goeasy (TSX:GSY) | CA$204.34 | CA$382.04 | 46.5% |
| Allied Gold (TSX:AAUC) | CA$16.91 | CA$28.47 | 40.6% |
Let's explore several standout options from the results in the screener.
First Majestic Silver (TSX:AG)
Overview: First Majestic Silver Corp. is involved in the acquisition, exploration, development, and production of mineral properties in North America, with a market cap of CA$5.98 billion.
Operations: The company's revenue segments include CA$230.87 million from San Dimas, CA$308.78 million from Santa Elena, CA$79.33 million from La Encantada in Mexico, and CA$27.36 million from First Mint and CA$2.71 million from Jerritt Canyon in the United States.
Estimated Discount To Fair Value: 32.3%
First Majestic Silver is trading at CA$12.25, significantly below its estimated fair value of CA$18.09, suggesting it may be undervalued based on cash flows. The company recently reported a substantial turnaround in earnings with net income of US$52.55 million for Q2 2025, compared to a loss last year. Despite past shareholder dilution, the company's earnings are expected to grow significantly faster than the Canadian market's average rate over the next few years.
- Upon reviewing our latest growth report, First Majestic Silver's projected financial performance appears quite optimistic.
- Click here to discover the nuances of First Majestic Silver with our detailed financial health report.
Ivanhoe Mines (TSX:IVN)
Overview: Ivanhoe Mines Ltd., along with its subsidiaries, focuses on the mining, development, and exploration of minerals and precious metals in Africa, with a market cap of CA$15.41 billion.
Operations: Ivanhoe Mines Ltd. operates through revenue segments primarily centered on the mining, development, and exploration of minerals and precious metals across Africa.
Estimated Discount To Fair Value: 42.4%
Ivanhoe Mines is trading at CA$11.51, well below its estimated fair value of CA$19.97, reflecting potential undervaluation based on cash flows. Despite recent seismic challenges impacting operations, the company reported a notable increase in earnings for the first half of 2025 to US$173.81 million from US$10.85 million last year. With expected significant growth in both revenue and earnings surpassing Canadian market averages, Ivanhoe remains a compelling consideration for investors focused on cash flow metrics.
- The analysis detailed in our Ivanhoe Mines growth report hints at robust future financial performance.
- Unlock comprehensive insights into our analysis of Ivanhoe Mines stock in this financial health report.
Versamet Royalties (TSXV:VMET)
Overview: Versamet Royalties Corporation is a metals royalty and streaming company that acquires and manages royalties, streams, and similar interests on mining operations and projects in Peru, Africa, and Canada, with a market cap of CA$742.27 million.
Operations: The company's revenue segments include $1.96 million from the Mercedes project in Mexico and $10.82 million from the Greenstone project in Canada.
Estimated Discount To Fair Value: 35.5%
Versamet Royalties, trading at CA$1.59, is significantly undervalued compared to its estimated fair value of CA$2.47, presenting a potential opportunity for investors focused on cash flow metrics. The company's revenue is projected to grow 22.8% annually, outpacing the broader Canadian market's growth rate. Recent developments include a CAD 400 million shelf registration and successful gold production at the Kiaka mine, which could enhance future cash flows and profitability prospects over the next three years.
- The growth report we've compiled suggests that Versamet Royalties' future prospects could be on the up.
- Dive into the specifics of Versamet Royalties here with our thorough financial health report.
Turning Ideas Into Actions
- Access the full spectrum of 27 Undervalued TSX Stocks Based On Cash Flows by clicking on this link.
- 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.
- Discover a world of investment opportunities with Simply Wall St's free app and access unparalleled stock analysis across all markets.
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 First Majestic Silver 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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