Stock Analysis

Top Three TSX Stocks Estimated To Be Undervalued In June 2024

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Amidst a shifting economic landscape marked by moderating inflation and central bank policies, the Canadian market presents unique opportunities for investors. As the Bank of Canada embarks on a potential rate-cutting cycle, understanding which stocks are undervalued becomes particularly crucial in leveraging these evolving market conditions.

Top 10 Undervalued Stocks Based On Cash Flows In Canada

NameCurrent PriceFair Value (Est)Discount (Est)
Calibre Mining (TSX:CXB)CA$1.77CA$3.1543.8%
Trisura Group (TSX:TSU)CA$42.05CA$80.1847.6%
Kinaxis (TSX:KXS)CA$150.29CA$250.6940%
Viemed Healthcare (TSX:VMD)CA$10.45CA$20.0848%
Aura Minerals (TSX:ORA)CA$12.70CA$21.4740.9%
Endeavour Mining (TSX:EDV)CA$28.29CA$53.9747.6%
Green Thumb Industries (CNSX:GTII)CA$16.06CA$27.2141%
Jamieson Wellness (TSX:JWEL)CA$27.86CA$46.8040.5%
Kits Eyecare (TSX:KITS)CA$7.98CA$14.3044.2%
Capstone Copper (TSX:CS)CA$8.83CA$16.3546%

Click here to see the full list of 23 stocks from our Undervalued TSX Stocks Based On Cash Flows screener.

Below we spotlight a couple of our favorites from our exclusive screener

Brookfield Asset Management (TSX:BAM)

Overview: Brookfield Asset Management Ltd. is a real estate investment firm specializing in alternative asset management services, with a market capitalization of approximately CA$21.84 billion.

Operations: The firm generates revenue through its specialization in managing alternative assets.

Estimated Discount To Fair Value: 22.1%

Brookfield Asset Management's recent strategic moves, including potential acquisitions and divestitures, underscore its active management approach amidst a dynamic market. Despite trading below fair value by more than 20%, concerns about dividend coverage persist. The company's revenue and earnings growth forecasts significantly outpace the market, suggesting potential underestimation by current valuations. However, shareholder dilution within the past year raises questions about future equity value retention.

TSX:BAM Discounted Cash Flow as at Jun 2024
TSX:BAM Discounted Cash Flow as at Jun 2024

Jamieson Wellness (TSX:JWEL)

Overview: Jamieson Wellness Inc. operates in the health products sector, focusing on the development, manufacturing, distribution, marketing, and sale of branded and customer-branded products for humans across Canada, the United States, China, and other international markets with a market cap of approximately CA$1.14 billion.

Operations: The company generates revenue through two primary segments: Jamieson Brands, which brought in CA$558.41 million, and Strategic Partners, contributing CA$109.08 million.

Estimated Discount To Fair Value: 40.5%

Jamieson Wellness, despite a recent quarterly loss with sales dropping to CA$128.04 million from CA$136.73 million year-over-year, maintains a positive outlook for 2024 with expected revenue between CA$720.0 million and CA$760.0 million. Trading at CA$27.86, significantly below the estimated fair value of CA$46.8, the stock appears undervalued based on cash flows and DCF analysis. However, its dividend coverage by cash flow is weak, raising concerns about sustainability despite an affirmed quarterly dividend of $0.19 per share.

TSX:JWEL Discounted Cash Flow as at Jun 2024
TSX:JWEL Discounted Cash Flow as at Jun 2024

Kinaxis (TSX:KXS)

Overview: Kinaxis Inc. is a company that offers cloud-based subscription software for supply chain operations across the United States, Europe, Asia, and Canada, with a market capitalization of approximately CA$4.22 billion.

Operations: The company generates its revenue primarily from software and programming services, amounting to CA$445.21 million.

Estimated Discount To Fair Value: 40%

Kinaxis, priced at CA$150.29, is considered undervalued against a fair value of CA$250.69 based on DCF analysis. Recent client gains like Intercos and Servier underscore its robust supply chain solutions amidst volatile markets, enhancing its appeal. Despite slower revenue growth projections at 14.7% annually compared to some peers, its earnings are expected to surge by 51% annually, outpacing the Canadian market average. However, significant insider selling in the past quarter might raise caution among investors.

TSX:KXS Discounted Cash Flow as at Jun 2024
TSX:KXS Discounted Cash Flow as at Jun 2024

Summing It All Up

  • Click this link to deep-dive into the 23 companies within our Undervalued TSX Stocks Based On Cash Flows screener.
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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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