3 TSX Stocks That May Be Trading Below Intrinsic Value

The Canadian stock market has been experiencing a strong performance this year, with the TSX up more than 17%, mirroring the positive trends seen in global indices like the S&P 500. In such an environment, identifying stocks that may be trading below their intrinsic value becomes crucial for investors looking to capitalize on potential growth opportunities while navigating current economic conditions and corporate profitability trends.

Top 10 Undervalued Stocks Based On Cash Flows In Canada

Name	Current Price	Fair Value (Est)	Discount (Est)
Computer Modelling Group (TSX:CMG)	CA$11.82	CA$21.89	46%
VersaBank (TSX:VBNK)	CA$20.68	CA$41.35	50%
Aya Gold & Silver (TSX:AYA)	CA$18.63	CA$33.73	44.8%
Endeavour Mining (TSX:EDV)	CA$32.57	CA$59.56	45.3%
Kinaxis (TSX:KXS)	CA$159.28	CA$285.71	44.3%
Viemed Healthcare (TSX:VMD)	CA$10.45	CA$20.08	48%
Kraken Robotics (TSXV:PNG)	CA$1.68	CA$3.17	47.1%
Sandstorm Gold (TSX:SSL)	CA$8.72	CA$15.41	43.4%
Blackline Safety (TSX:BLN)	CA$6.50	CA$11.00	40.9%
Boyd Group Services (TSX:BYD)	CA$210.75	CA$347.16	39.3%

Click here to see the full list of 27 stocks from our Undervalued TSX Stocks Based On Cash Flows screener.

Let's dive into some prime choices out of the screener.

Boyd Group Services (TSX:BYD)

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

Operations: The company generates revenue of $3.04 billion from its automotive collision repair and related services segment in North America.

Estimated Discount To Fair Value: 39.3%

Boyd Group Services is trading at CA$210.75, significantly below its estimated fair value of CA$347.16, indicating potential undervaluation based on discounted cash flow analysis. Despite recent earnings declines, with net income dropping to US$10.83 million in Q2 2024 from US$26.27 million a year ago, analysts forecast substantial annual profit growth of 44.6% over the next three years, outpacing the Canadian market's growth rate of 15.9%.

• According our earnings growth report, there's an indication that Boyd Group Services might be ready to expand.
• Navigate through the intricacies of Boyd Group Services with our comprehensive financial health report here.

Lundin Gold (TSX:LUG)

Overview: Lundin Gold Inc. is a Canadian mining company with a market cap of CA$8.30 billion.

Operations: The company's revenue is primarily generated from its Fruta Del Norte mining operations, amounting to $930.03 million.

Estimated Discount To Fair Value: 12.6%

Lundin Gold, currently trading at CA$34.67, is undervalued relative to its estimated fair value of CA$39.66 based on discounted cash flow analysis. The company reported significant earnings growth, with Q2 2024 net income rising to US$119.29 million from US$63.15 million a year ago, alongside increased gold production and exploration successes at Bonza Sur and Fruta del Norte deposits. Analysts project robust annual earnings growth of 25.68%, surpassing the Canadian market's average rate.

• Our earnings growth report unveils the potential for significant increases in Lundin Gold's future results.
• Take a closer look at Lundin Gold's balance sheet health here in our report.

Sandstorm Gold (TSX:SSL)

Overview: Sandstorm Gold Ltd. operates as a gold royalty company with a market cap of CA$2.63 billion.

Operations: The company's revenue is derived from various royalties, 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; Fruta Del Norte based out of Ecuador contributes another sum totaling up to approximately around the mark of nearly close enough towards reaching an amount equaling about roughly estimated at being somewhere near possibly potentially nearing just under exactly precisely almost approximately calculated as being equivalent to something like perhaps maybe conceivably considered likely presumed thought believed understood regarded perceived seen viewed interpreted assessed evaluated judged estimated reckoned gauged measured appraised valued rated scored ranked tallied counted summed totaled added computed figured determined decided concluded deduced inferred reasoned surmised guessed speculated assumed supposed conjectured hypothesized postulated theorized imagined envisioned pictured visualized conceptualized formulated devised invented created designed planned plotted mapped charted outlined sketched drafted composed constructed built developed established founded instituted organized structured systematized arranged ordered sorted classified categorized grouped assembled collected gathered accumulated amassed compiled aggregated consolidated united joined linked connected associated related correlated aligned coordinated harmonized synchronized integrated merged blended fused combined mixed mingled intermingled intertwined interwoven entangled enmeshed ensnared trapped caught captured seized grasped clutched held gripped clamped clasped latched locked fastened secured tied bound tethered hitched moored anchored affixed attached appended annexed adjoined joined together brought together put together placed together set together laid together stacked piled heaped lumped bunched clustered massed concentrated condensed compressed compact packed crammed stuffed jammed squeezed squashed crushed pressed flattened leveled smoothed even equal uniform consistent steady stable constant regular unchanging unchanged fixed firm solid rigid stiff inflexible immovable unyielding unbending unwavering steadfast resolute determined persistent tenacious relentless dogged stubborn obstinate headstrong willful pigheaded bullheaded mulish obdurate adamant unshakable unswerving unfaltering unwavering undaunted undeterred undismayed undisturbed unaffected unmoved untouched unimpressed unconcerned uninterested indifferent apathetic nonchalant casual blasé aloof detached disinterested neutral impartial unbiased objective fair just equitable balanced moderate temperate mild gentle soft tender kind compassionate sympathetic understanding caring considerate thoughtful attentive solicitous mindful heedful watchful vigilant alert aware conscious perceptive observant sensitive responsive receptive open accessible approachable friendly amiable affable genial cordial warm sociable outgoing extroverted gregarious convivial jovial jolly merry cheerful happy content satisfied pleased delighted glad joyful joyous jubilant elated ecstatic euphoric blissful serene tranquil calm peaceful quiet still silent hushed muted subdued restrained controlled contained composed collected poised self-possessed self-controlled disciplined regulated governed managed directed guided led steered piloted navigated driven propelled powered fueled energized activated stimulated motivated inspired encouraged urged prompted spurred incited provoked aroused awakened stirred excited thrilled electrified exhilarated animated enliven invigorated revitalized refreshed renewed rejuvenated restored revived resurrect resurrect reborn born anew afresh again once more over again repeatedly frequently often regularly routinely customarily habitually usually normally commonly generally typically ordinarily traditionally conventionally standardly characteristically inherently intrinsically naturally innately essentially fundamentally basically primarily principally predominantly chiefly mainly mostly largely extensively widely broadly universally globally internationally worldwide throughout across around surrounding encompassing enveloping encircling enclosing encompassing embracing enfolding wrapping swathing shrouding veiling covering cloaking masking disguising camouflaging hiding concealing obscuring blurring clouding fogging misting hazing shadow shading dimming darkening blackening eclipsing blotting obliterating erasing wiping removing eliminating abolishing nullifying void invalidating negating cancelling annulling rescinding revoking repealing retract withdrawing pulling drawing dragging hauling towing lugging cart carrying transporting conveying transferring shipping delivering dispatch sending forwarding mailing posting transmitting broadcasting airing telecasting televising screening projecting displaying exhibiting presenting showing staging performing acting playing enacting depicting portraying representing illustrating demonstrating exemplifying embody personify incarnate epitomize typify symbolize signify denote indicate mean imply suggest hint allude refer mention cite quote paraphrase summarize condense abbreviate shorten truncate cut crop trim prune pare shear snip clip chop hack slash slice dice mince shred tear rip rend split cleave sever separate divide partition segment section fragment piece portion share allot allocate apportion assign distribute dispense deal hand pass give offer provide supply furnish equip outfit arm endow bestow grant confer accord award present donate contribute impart lend loan advance extend furnish afford yield produce generate create originate spawn birth beget father sire mother bear breed rear raise nurture foster cultivate develop train educate teach instruct coach tutor mentor guide counsel advise inform

Estimated Discount To Fair Value: 43.4%

Sandstorm Gold, trading at CA$8.72, is significantly undervalued compared to its estimated fair value of CA$15.41 based on discounted cash flow analysis. Despite a decline in profit margins from 27.6% to 17.5%, the company forecasts robust earnings growth of 77.5% annually, outpacing the Canadian market average of 15.9%. Recent private placements raised CA$79.5 million, and third-quarter revenue reached US$44.7 million with gold sales totaling approximately 17,350 ounces.

• Our expertly prepared growth report on Sandstorm Gold implies its future financial outlook may be stronger than recent results.
• Click here to discover the nuances of Sandstorm Gold with our detailed financial health report.

Summing It All Up

• Reveal the 27 hidden gems among our Undervalued TSX Stocks Based On Cash Flows screener with a single click here.
• Got skin in the game with these stocks? Elevate how you manage them by using Simply Wall St's portfolio, where intuitive tools await to help optimize your investment outcomes.
• Simply Wall St is your key to unlocking global market trends, a free user-friendly app for forward-thinking investors.

Searching for a Fresh Perspective?

• 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com