Despite rising tariff rates, the Canadian market has shown resilience, with inflation and economic data remaining stable. As investors navigate potential volatility in the months ahead, identifying undervalued stocks becomes crucial for those looking to capitalize on market fluctuations and position themselves strategically for future growth.
Top 10 Undervalued Stocks Based On Cash Flows In Canada
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| Trisura Group (TSX:TSU) | CA$44.79 | CA$88.63 | 49.5% |
| TerraVest Industries (TSX:TVK) | CA$167.56 | CA$318.41 | 47.4% |
| Teck Resources (TSX:TECK.B) | CA$52.49 | CA$88.73 | 40.8% |
| OceanaGold (TSX:OGC) | CA$19.87 | CA$35.71 | 44.4% |
| Magna Mining (TSXV:NICU) | CA$1.84 | CA$3.41 | 46% |
| Magellan Aerospace (TSX:MAL) | CA$17.60 | CA$26.83 | 34.4% |
| Foraco International (TSX:FAR) | CA$1.76 | CA$3.25 | 45.9% |
| Exchange Income (TSX:EIF) | CA$65.98 | CA$101.05 | 34.7% |
| Blackline Safety (TSX:BLN) | CA$6.50 | CA$9.96 | 34.7% |
| Avino Silver & Gold Mines (TSX:ASM) | CA$4.94 | CA$9.10 | 45.7% |
Let's dive into some prime choices out of the screener.
Lithium Royalty (TSX:LIRC)
Overview: Lithium Royalty Corp. is a lithium-focused royalty company with operations in Canada, the United States, Australia, Argentina, Brazil, and South America and has a market cap of CA$342.78 million.
Operations: The company's revenue is primarily derived from the acquisition and management of royalty rights and working interests, amounting to $3.02 million.
Estimated Discount To Fair Value: 29.9%
Lithium Royalty Corp. is trading at CA$6.09, significantly below its estimated fair value of CA$8.69, suggesting it may be undervalued based on discounted cash flow analysis. Despite a current net loss of US$0.89 million for Q1 2025, revenue is forecast to grow rapidly at 61% annually, outpacing the Canadian market's growth rate. The company has initiated a share buyback program to repurchase up to 5% of its outstanding shares by July 2026, which could enhance shareholder value over time.
- Insights from our recent growth report point to a promising forecast for Lithium Royalty's business outlook.
- Get an in-depth perspective on Lithium Royalty's balance sheet by reading our health report here.
Magellan Aerospace (TSX:MAL)
Overview: Magellan Aerospace Corporation, with a market cap of CA$1.02 billion, engineers and manufactures aeroengine and aerostructure components for aerospace markets in Canada, the United States, and Europe.
Operations: Magellan Aerospace generates revenue of CA$968.02 million from its aerospace segment, focusing on the engineering and manufacturing of aeroengine and aerostructure components across Canada, the United States, and Europe.
Estimated Discount To Fair Value: 34.4%
Magellan Aerospace is trading at CA$17.6, well below its estimated fair value of CA$26.83, highlighting potential undervaluation based on cash flows. Recent earnings show strong growth with net income rising to CA$10.83 million for Q1 2025 from CA$6.31 million a year earlier, reflecting improved financial performance. The company’s strategic agreements with major aerospace firms like Pratt & Whitney Canada and GE Aerospace further bolster its long-term revenue prospects and operational capabilities.
- According our earnings growth report, there's an indication that Magellan Aerospace might be ready to expand.
- Click here to discover the nuances of Magellan Aerospace with our detailed financial health report.
Timbercreek Financial (TSX:TF)
Overview: Timbercreek Financial Corp. offers shorter-duration structured financing solutions to commercial real estate investors in Canada and has a market cap of CA$647.13 million.
Operations: Timbercreek Financial's revenue is primarily generated from its financial services segment, specifically through mortgage-related activities, amounting to CA$72.43 million.
Estimated Discount To Fair Value: 29.0%
Timbercreek Financial is trading at CA$7.81, significantly below its estimated fair value of CA$11, indicating potential undervaluation based on cash flows. Despite a decline in sales to CA$3.16 million for Q1 2025 from the previous year, net income increased slightly to CA$14.77 million. The company has initiated a share buyback program and consistently declared monthly dividends of CA$0.0575 per share, although these are not well-covered by earnings or free cash flows.
- In light of our recent growth report, it seems possible that Timbercreek Financial's financial performance will exceed current levels.
- Unlock comprehensive insights into our analysis of Timbercreek Financial stock in this financial health report.
Taking Advantage
- Click here to access our complete index of 26 Undervalued TSX Stocks Based On Cash Flows.
- Already own these companies? Bring clarity to your investment decisions by linking up your portfolio with Simply Wall St, where you can monitor all the vital signs of your stocks effortlessly.
- Unlock the power of informed investing with Simply Wall St, your free guide to navigating stock markets worldwide.
Seeking Other Investments?
- 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.
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