3 Top Stocks Estimated To Be Trading Up To 46.8% Below Intrinsic Value

As global markets respond to China's robust stimulus measures, U.S. stocks have reached record highs, driven by optimism in technology and materials sectors. Amidst these developments, identifying undervalued stocks can be particularly rewarding, as they may offer significant growth potential when trading below their intrinsic value in a buoyant market environment.

Top 10 Undervalued Stocks Based On Cash Flows

Name	Current Price	Fair Value (Est)	Discount (Est)
First Internet Bancorp (NasdaqGS:INBK)	US$30.50	US$60.91	49.9%
Zhejiang Great Shengda PackagingLtd (SHSE:603687)	CN¥7.11	CN¥14.16	49.8%
Litium (OM:LITI)	SEK8.18	SEK16.33	49.9%
TSE (KOSDAQ:A131290)	₩50200.00	₩100028.81	49.8%
Arcadis (ENXTAM:ARCAD)	€63.00	€125.30	49.7%
Super Group (JSE:SPG)	ZAR23.30	ZAR46.16	49.5%
HSS Engineers Berhad (KLSE:HSSEB)	MYR1.08	MYR2.14	49.5%
ABCO Electronics (KOSDAQ:A036010)	₩5760.00	₩11482.77	49.8%
OKEA (OB:OKEA)	NOK23.50	NOK46.62	49.6%
SunOpta (NasdaqGS:STKL)	US$6.35	US$12.65	49.8%

Click here to see the full list of 951 stocks from our Undervalued Stocks Based On Cash Flows screener.

Here's a peek at a few of the choices from the screener.

Tencent Holdings (SEHK:700)

Overview: Tencent Holdings Limited is an investment holding company that provides value-added services, online advertising, fintech, and business services both in China and internationally, with a market capitalization of approximately HK$4.29 trillion.

Operations: The company's revenue is primarily derived from Value-Added Services (CN¥302.28 billion), Fintech and Business Services (CN¥209.17 billion), and Online Advertising (CN¥111.89 billion).

Estimated Discount To Fair Value: 18.4%

Tencent Holdings is trading at HK$477.6, 18.4% below its estimated fair value of HK$585.12, suggesting potential undervaluation based on discounted cash flows. Recent earnings showed strong growth with second-quarter net income rising to CNY 47.63 billion from CNY 26.17 billion a year ago, despite significant insider selling over the past three months. Revenue and earnings are projected to grow faster than the Hong Kong market, though not significantly exceeding expected benchmarks for substantial growth rates.

• According our earnings growth report, there's an indication that Tencent Holdings might be ready to expand.
• Click here to discover the nuances of Tencent Holdings with our detailed financial health report.

Semiconductor Manufacturing International (SEHK:981)

Overview: Semiconductor Manufacturing International Corporation is an investment holding company involved in the manufacture, testing, and sale of integrated circuits across the United States, China, and Eurasia with a market cap of approximately HK$258.29 billion.

Operations: The company generates revenue primarily through its manufacture and sale of integrated circuits, amounting to $6.95 billion.

Estimated Discount To Fair Value: 46.8%

Semiconductor Manufacturing International is trading at HK$27.35, significantly below its estimated fair value of HK$51.4, indicating potential undervaluation based on discounted cash flows. Despite a decline in profit margins from 22.7% to 7.3%, earnings are expected to grow significantly over the next three years, outpacing the Hong Kong market's growth rate. Recent changes include Academician Wu Hanming joining the audit committee, potentially strengthening governance oversight amidst these financial dynamics.

• The analysis detailed in our Semiconductor Manufacturing International growth report hints at robust future financial performance.
• Take a closer look at Semiconductor Manufacturing International's balance sheet health here in our report.

China Jushi (SHSE:600176)

Overview: China Jushi Co., Ltd. is involved in the manufacture and sale of fiberglass both in China and internationally, with a market capitalization of approximately CN¥47.08 billion.

Operations: The company's revenue primarily stems from the production and sales of glass fiber and its products, amounting to CN¥14.79 billion.

Estimated Discount To Fair Value: 15.6%

China Jushi is trading at CN¥11.76, below its estimated fair value of CN¥13.93, suggesting undervaluation based on cash flows. Despite a drop in profit margins from 27.7% to 13.1%, earnings are forecasted to grow significantly at 27.74% annually over the next three years, surpassing the Chinese market's growth rate of 23.3%. However, debt coverage by operating cash flow remains inadequate and recent financials show reduced net income year-on-year.

• Our earnings growth report unveils the potential for significant increases in China Jushi's future results.
• Get an in-depth perspective on China Jushi's balance sheet by reading our health report here.

Taking Advantage

• Gain an insight into the universe of 951 Undervalued Stocks Based On Cash Flows by clicking here.
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Looking For Alternative Opportunities?

• 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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