Uncovering Value Stock Picks For January 2025

January 10, 2025

As we enter January 2025, global markets are reflecting a mixed performance with the U.S. indices closing out a strong year despite recent fluctuations, while economic indicators like the Chicago PMI highlight ongoing challenges in manufacturing. Amidst these dynamics, identifying undervalued stocks can be crucial for investors looking to capitalize on potential opportunities within sectors that may benefit from current market conditions and economic trends.

Top 10 Undervalued Stocks Based On Cash Flows

Name	Current Price	Fair Value (Est)	Discount (Est)
Avant Group (TSE:3836)	¥1878.00	¥3755.66	50%
NBTM New Materials Group (SHSE:600114)	CN¥15.55	CN¥31.07	49.9%
Gaming Realms (AIM:GMR)	£0.36	£0.72	49.9%
Sudarshan Chemical Industries (BSE:506655)	₹1120.30	₹2232.36	49.8%
Kinaxis (TSX:KXS)	CA$170.99	CA$340.11	49.7%
ReadyTech Holdings (ASX:RDY)	A$3.15	A$6.30	50%
Vogo (ENXTPA:ALVGO)	€2.94	€5.87	49.9%
Exosens (ENXTPA:EXENS)	€22.505	€44.77	49.7%
iFLYTEKLTD (SZSE:002230)	CN¥45.41	CN¥90.65	49.9%
Salmones Camanchaca (SNSE:SALMOCAM)	CLP2434.90	CLP4848.26	49.8%

Click here to see the full list of 885 stocks from our Undervalued Stocks Based On Cash Flows screener.

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

Mao Geping Cosmetics (SEHK:1318)

Overview: Mao Geping Cosmetics Co., Ltd. operates in China, offering color cosmetics and skincare products under the MAOGEPING and Love Keeps brands, with a market cap of HK$27.82 billion.

Operations: The company generates CN¥3.46 billion in revenue from its personal products segment.

Estimated Discount To Fair Value: 29.2%

Mao Geping Cosmetics is trading at HK$58.15, below its estimated fair value of HK$82.13, suggesting undervaluation based on cash flows. The company recently completed an IPO worth HK$2.34 billion, enhancing its financial position. Earnings grew by 59.2% last year and are expected to grow significantly at 24.3% annually over the next three years, outpacing the Hong Kong market's growth rate of 11.1%, despite shares being highly illiquid.

SEHK:1318 Discounted Cash Flow as at Jan 2025

SolaX Power Network Technology (Zhejiang) (SHSE:688717)

Overview: SolaX Power Network Technology (Zhejiang) Co., Ltd. (ticker: SHSE:688717) operates in the renewable energy sector, focusing on the development and manufacturing of solar power products, with a market cap of CN¥7.64 billion.

Operations: The company's revenue is primarily derived from its Electronic Components & Parts segment, totaling CN¥2.87 billion.

Estimated Discount To Fair Value: 23.9%

SolaX Power Network Technology (Zhejiang) is trading at CN¥47.73, below its estimated fair value of CN¥62.74, indicating potential undervaluation based on cash flows. Despite a decline in net income and profit margins compared to the previous year, earnings are projected to grow significantly at 55% annually over the next three years. Revenue growth is also expected to outpace the broader Chinese market, although return on equity forecasts remain modest at 12.1%.

SHSE:688717 Discounted Cash Flow as at Jan 2025

Zhejiang Songyuan Automotive Safety SystemsLtd (SZSE:300893)

Overview: Zhejiang Songyuan Automotive Safety Systems Co., Ltd. operates in the automotive safety industry, focusing on the production and sale of safety systems, with a market cap of CN¥6.76 billion.

Operations: The company generates revenue of CN¥1.78 billion from its Auto Parts & Accessories segment.

Estimated Discount To Fair Value: 20%

Zhejiang Songyuan Automotive Safety Systems is trading at CN¥29.86, significantly below its estimated fair value of CN¥37.34, highlighting potential undervaluation based on cash flows. The company reported strong earnings growth with net income rising to CNY 190.71 million for the first nine months of 2024. Despite high debt levels and a dividend not well covered by free cash flows, revenue and earnings are forecasted to grow substantially above market rates in the coming years.

SZSE:300893 Discounted Cash Flow as at Jan 2025

Make It Happen

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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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