Boyd Group Services And 2 Other Stocks On The TSX Possibly Trading Below Fair Value

As the Canadian market rebounds from recent volatility, buoyed by easing inflation and positive economic data, investors are closely watching central bank policies for further rate cuts. In this environment, identifying undervalued stocks becomes crucial as they offer potential opportunities for growth amidst shifting market conditions.

Top 10 Undervalued Stocks Based On Cash Flows In Canada

Name	Current Price	Fair Value (Est)	Discount (Est)
goeasy (TSX:GSY)	CA$185.16	CA$358.57	48.4%
Alvopetro Energy (TSXV:ALV)	CA$5.04	CA$9.08	44.5%
Computer Modelling Group (TSX:CMG)	CA$12.64	CA$22.27	43.2%
Kinaxis (TSX:KXS)	CA$154.45	CA$283.06	45.4%
Obsidian Energy (TSX:OBE)	CA$9.56	CA$18.16	47.4%
Africa Oil (TSX:AOI)	CA$2.09	CA$3.70	43.5%
Viemed Healthcare (TSX:VMD)	CA$10.45	CA$20.08	48%
Green Thumb Industries (CNSX:GTII)	CA$15.02	CA$29.99	49.9%
NFI Group (TSX:NFI)	CA$19.00	CA$37.45	49.3%
NanoXplore (TSX:GRA)	CA$2.30	CA$4.20	45.3%

Click here to see the full list of 35 stocks from our Undervalued TSX Stocks Based On Cash Flows screener.

Here we highlight a subset of our preferred stocks from the screener.

Boyd Group Services (TSX:BYD)

Overview: Boyd Group Services Inc., with a market cap of CA$4.68 billion, operates non-franchised collision repair centers across North America.

Operations: Boyd Group Services Inc. generates CA$3.04 billion in revenue from automotive collision repair and related services across North America.

Estimated Discount To Fair Value: 34.8%

Boyd Group Services appears undervalued based on discounted cash flow analysis, trading at CA$224.61, significantly below its estimated fair value of CA$344.66. Despite recent earnings declines—net income dropped to US$10.83 million in Q2 2024 from US$26.27 million a year ago—analysts forecast substantial annual profit growth of 49.1%, outpacing the Canadian market's 14.9%. However, revenue growth is expected to be moderate at 9.3% per year, above the market average but not exceptionally high.

• Upon reviewing our latest growth report, Boyd Group Services' projected financial performance appears quite optimistic.
• Navigate through the intricacies of Boyd Group Services with our comprehensive financial health report here.

Constellation Software (TSX:CSU)

Overview: Constellation Software Inc., with a market cap of CA$8.96 billion, acquires, builds, and manages vertical market software businesses in Canada, the United States, Europe, and internationally.

Operations: Constellation Software Inc. generates CA$9.27 billion in revenue from its Software & Programming segment across Canada, the United States, Europe, and internationally.

Estimated Discount To Fair Value: 34.1%

Constellation Software appears undervalued based on discounted cash flow analysis, trading at CA$4217.04, well below its estimated fair value of CA$6402.4. Recent earnings reports show strong performance with Q2 revenue rising to US$2.47 billion from US$2.04 billion a year ago and net income increasing to US$177 million from US$103 million. Despite a high debt level, analysts forecast substantial annual profit growth of 23.55%, significantly outpacing the Canadian market's average growth rate.

• The analysis detailed in our Constellation Software growth report hints at robust future financial performance.
• Delve into the full analysis health report here for a deeper understanding of Constellation Software.

Ivanhoe Mines (TSX:IVN)

Overview: Ivanhoe Mines Ltd. engages in the mining, development, and exploration of minerals and precious metals primarily in Africa, with a market cap of CA$23.26 billion.

Operations: Ivanhoe Mines Ltd. generates revenue through the mining, development, and exploration of minerals and precious metals primarily in Africa.

Estimated Discount To Fair Value: 22.3%

Ivanhoe Mines appears significantly undervalued, trading at CA$17.88 compared to its estimated fair value of CA$23.02. Despite a recent dip in net income for Q2 2024 (US$76.4 million vs US$92.04 million last year), the company’s revenue is expected to grow at 47.5% annually, outpacing the Canadian market's growth rate of 6.6%. The completion of Phase 3 concentrator ahead of schedule and on budget will boost production capacity, enhancing future cash flows and earnings growth projections by over 40% annually.

• Our comprehensive growth report raises the possibility that Ivanhoe Mines is poised for substantial financial growth.
• Take a closer look at Ivanhoe Mines' balance sheet health here in our report.

Summing It All Up

• Investigate our full lineup of 35 Undervalued TSX Stocks Based On Cash Flows right here.
• Are these companies part of your investment strategy? Use Simply Wall St to consolidate your holdings into a portfolio and gain insights with our comprehensive analysis tools.
• Streamline your investment strategy with Simply Wall St's app for free and benefit from extensive research on stocks across all corners of the world.

Curious About Other Options?

• 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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