3 TSX Stocks Estimated To Be Trading At Up To 42.6% Below Intrinsic Value

As the Canadian market navigates a landscape marked by ambiguous guidance from central banks and potential volatility around economic data releases, investors are closely watching how these factors might influence interest rate decisions. In such an environment, identifying stocks trading below their intrinsic value can offer opportunities for those looking to capitalize on market inefficiencies.

Top 10 Undervalued Stocks Based On Cash Flows In Canada

Name	Current Price	Fair Value (Est)	Discount (Est)
WELL Health Technologies (TSX:WELL)	CA$5.03	CA$9.83	48.8%
Vitalhub (TSX:VHI)	CA$11.15	CA$19.11	41.7%
Meren Energy (TSX:MER)	CA$1.90	CA$3.06	37.8%
Magellan Aerospace (TSX:MAL)	CA$16.26	CA$28.35	42.6%
K92 Mining (TSX:KNT)	CA$16.19	CA$25.59	36.7%
Haivision Systems (TSX:HAI)	CA$4.94	CA$9.40	47.5%
First Majestic Silver (TSX:AG)	CA$16.27	CA$26.53	38.7%
Discovery Silver (TSX:DSV)	CA$4.88	CA$8.22	40.6%
BRP (TSX:DOO)	CA$84.25	CA$143.27	41.2%
Aritzia (TSX:ATZ)	CA$85.74	CA$140.53	39%

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

Underneath we present a selection of stocks filtered out by our screen.

Magellan Aerospace (TSX:MAL)

Overview: Magellan Aerospace Corporation, with a market cap of CA$946.79 million, engineers and manufactures aeroengine and aerostructure components for aerospace markets in Canada, the United States, and Europe.

Operations: The company's revenue is primarily derived from its aerospace segment, which generated CA$974.91 million.

Estimated Discount To Fair Value: 42.6%

Magellan Aerospace is trading at CA$16.26, significantly below its estimated fair value of CA$28.35, indicating it may be undervalued based on cash flows. The company’s earnings are forecast to grow 33.2% annually, outpacing the Canadian market's 11.2%. Recent earnings showed a slight increase in sales but a decline in net income for Q2 2025 compared to last year, reflecting mixed financial performance despite strong growth prospects.

• Our earnings growth report unveils the potential for significant increases in Magellan Aerospace's future results.
• Delve into the full analysis health report here for a deeper understanding of Magellan Aerospace.

Orla Mining (TSX:OLA)

Overview: Orla Mining Ltd. is engaged in the acquisition, exploration, development, and exploitation of mineral properties with a market cap of CA$4.77 billion.

Operations: Orla Mining Ltd. generates its revenue through activities related to the acquisition, exploration, development, and exploitation of mineral properties.

Estimated Discount To Fair Value: 31%

Orla Mining is trading at CA$14.64, below its estimated fair value of CA$21.22, suggesting it could be undervalued based on cash flows. The company anticipates significant annual earnings growth of 76.9%, exceeding the Canadian market's forecasted growth rate, with revenue expected to rise by 23.3% annually. Recent developments include a major milestone in federal permitting for its South Railroad Project and a revised production guidance increase to up to 300,000 ounces of gold for 2025.

• The growth report we've compiled suggests that Orla Mining's future prospects could be on the up.
• Click here to discover the nuances of Orla Mining 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$633.89 million.

Operations: The company generates revenue primarily through its financial services segment, specifically mortgage financing, which amounted to CA$67.32 million.

Estimated Discount To Fair Value: 32.4%

Timbercreek Financial, trading at CA$7.6 and below its estimated fair value of CA$11.25, appears undervalued based on cash flows. Its revenue is forecast to grow 27.9% annually, outpacing the Canadian market's 4% growth rate. However, its dividend yield of 9.08% isn't well covered by earnings or free cash flows, and debt coverage by operating cash flow remains inadequate despite a recent credit facility expansion to CA$600 million for corporate flexibility.

• In light of our recent growth report, it seems possible that Timbercreek Financial's financial performance will exceed current levels.
• Get an in-depth perspective on Timbercreek Financial's balance sheet by reading our health report here.

Turning Ideas Into Actions

• Delve into our full catalog of 26 Undervalued TSX Stocks Based On Cash Flows here.
• Have a stake in these businesses? Integrate your holdings into Simply Wall St's portfolio for notifications and detailed stock reports.
• Enhance your investing ability with the Simply Wall St app and enjoy free access to essential market intelligence spanning every continent.

Contemplating Other Strategies?

• 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