3 Stocks Estimated To Be Up To 42.7% Below Intrinsic Value

As global markets continue to reach record highs, with indices like the Dow Jones Industrial Average and S&P 500 Index climbing steadily, investors are keenly observing the implications of domestic policy changes and geopolitical developments. Amid this backdrop, identifying stocks that are potentially undervalued becomes crucial for those looking to capitalize on market inefficiencies; this involves assessing intrinsic value against current market prices.

Top 10 Undervalued Stocks Based On Cash Flows

Name	Current Price	Fair Value (Est)	Discount (Est)
Shandong Bailong Chuangyuan Bio-Tech (SHSE:605016)	CN¥16.64	CN¥33.16	49.8%
Pan African Resources (AIM:PAF)	£0.3735	£0.75	49.9%
Sudarshan Chemical Industries (BSE:506655)	₹1116.10	₹2222.42	49.8%
Iguatemi (BOVESPA:IGTI3)	R$2.25	R$4.49	49.8%
Elekta (OM:EKTA B)	SEK61.50	SEK122.95	50%
Adtraction Group (OM:ADTR)	SEK38.40	SEK76.45	49.8%
Pluk Phak Praw Rak Mae (SET:OKJ)	THB15.50	THB30.86	49.8%
Privia Health Group (NasdaqGS:PRVA)	US$21.66	US$43.17	49.8%
Energy One (ASX:EOL)	A$5.30	A$10.55	49.8%
Sands China (SEHK:1928)	HK$20.40	HK$40.58	49.7%

Click here to see the full list of 891 stocks from our Undervalued Stocks Based On Cash Flows screener.

We're going to check out a few of the best picks from our screener tool.

UPM-Kymmene Oyj (HLSE:UPM)

Overview: UPM-Kymmene Oyj, with a market cap of €13.78 billion, operates in the forest-based bioindustry across Europe, North America, Asia, and internationally through its subsidiaries.

Operations: The company generates revenue through its segments: UPM Energy (€658 million), UPM Fibres (€3.51 billion), UPM Plywood (€412 million), UPM Raflatac (€1.55 billion), UPM Specialty Papers (€1.47 billion), and UPM Communication Papers (€3.06 billion).

Estimated Discount To Fair Value: 42.7%

UPM-Kymmene Oyj is trading at €25.84, significantly below its estimated fair value of €45.06, suggesting it may be undervalued based on cash flows. Despite a low forecasted return on equity of 13.7%, analysts agree the stock price could rise by 26%. Revenue growth is expected to outpace the Finnish market, and earnings are projected to grow significantly at 22.54% annually, although dividends remain under-covered by earnings or free cash flows.

• According our earnings growth report, there's an indication that UPM-Kymmene Oyj might be ready to expand.
• Dive into the specifics of UPM-Kymmene Oyj here with our thorough financial health report.

SK Biopharmaceuticals (KOSE:A326030)

Overview: SK Biopharmaceuticals Co., Ltd. is a pharmaceutical company focused on researching and developing drugs for central nervous system disorders, with a market cap of approximately ₩8.19 billion.

Operations: The company's revenue primarily comes from its New Drug Development segment, amounting to ₩511.33 million.

Estimated Discount To Fair Value: 40.2%

SK Biopharmaceuticals is trading at ₩104,600, well below its estimated fair value of ₩174,854.38. The company became profitable this year and is expected to see significant earnings growth of 66.05% annually over the next three years, outpacing the Korean market's average. Recent strategic alliances in radiopharmaceuticals aim to expedite drug development and expand their pipeline capabilities, potentially enhancing future cash flows despite high levels of non-cash earnings currently present.

• Our expertly prepared growth report on SK Biopharmaceuticals implies its future financial outlook may be stronger than recent results.
• Click here and access our complete balance sheet health report to understand the dynamics of SK Biopharmaceuticals.

Shenzhen Megmeet Electrical (SZSE:002851)

Overview: Shenzhen Megmeet Electrical Co., LTD focuses on the research, development, production, sales, and services of hardware, software, and system solutions for electrical automation in China with a market cap of CN¥22.13 billion.

Operations: Shenzhen Megmeet Electrical Co., LTD generates revenue through the development and provision of hardware, software, and system solutions for electrical automation in China.

Estimated Discount To Fair Value: 21.6%

Shenzhen Megmeet Electrical is trading at CNY 42.21, below its estimated fair value of CNY 53.86, indicating potential undervaluation based on cash flows. Despite a recent decline in net income to CNY 411.15 million for the first nine months of 2024, the company's earnings are forecast to grow significantly at over 30% annually, surpassing market averages. A share buyback program worth up to CNY 40 million could further support shareholder value.

• The analysis detailed in our Shenzhen Megmeet Electrical growth report hints at robust future financial performance.
• Click here to discover the nuances of Shenzhen Megmeet Electrical with our detailed financial health report.

Taking Advantage

• Dive into all 891 of the Undervalued Stocks Based On Cash Flows we have identified here.
• Shareholder in one or more of these companies? Ensure you're never caught off-guard by adding your portfolio in Simply Wall St for timely alerts on significant stock developments.
• Simply Wall St is your key to unlocking global market trends, a free user-friendly app for forward-thinking investors.

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.

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