Yahoo Finance Exploring Three ASX Stocks Estimated To Be Up To 41.4% Below Intrinsic Value
The Australian stock market has seen a recent dip, dropping 2.0% over the last week, yet it maintains a positive trajectory with a 6.1% increase over the past year and earnings expected to grow by 14% annually. In such a fluctuating environment, identifying stocks that are trading below their intrinsic value could present opportunities for investors looking for potential growth at reduced prices.
Top 10 Undervalued Stocks Based On Cash Flows In Australia
Name | Current Price | Fair Value (Est) | Discount (Est) |
LaserBond (ASX:LBL) | A$0.70 | A$1.21 | 42.1% |
Charter Hall Group (ASX:CHC) | A$12.50 | A$22.77 | 45.1% |
HMC Capital (ASX:HMC) | A$7.42 | A$14.23 | 47.9% |
ReadyTech Holdings (ASX:RDY) | A$3.22 | A$5.95 | 45.9% |
Atturra (ASX:ATA) | A$0.74 | A$1.51 | 51% |
hipages Group Holdings (ASX:HPG) | A$1.04 | A$1.94 | 46.4% |
IPH (ASX:IPH) | A$6.20 | A$11.37 | 45.5% |
Millennium Services Group (ASX:MIL) | A$1.145 | A$2.24 | 48.9% |
SiteMinder (ASX:SDR) | A$4.99 | A$8.34 | 40.2% |
Treasury Wine Estates (ASX:TWE) | A$12.08 | A$20.61 | 41.4% |
We'll examine a selection from our screener results
Flight Centre Travel Group
Overview: Flight Centre Travel Group Limited operates as a travel retailer serving both leisure and corporate sectors across Australia, New Zealand, the Americas, Europe, the Middle East, Africa, Asia, and internationally with a market capitalization of A$4.39 billion.
Operations: The company generates revenue primarily through its leisure and corporate travel services, amounting to A$1.28 billion and A$1.06 billion respectively.
Estimated Discount To Fair Value: 19.7%
Flight Centre Travel Group is positioned intriguingly in the Australian market with its earnings expected to grow at 18.8% annually, outpacing the broader market's 13.7%. While its revenue growth forecast of 9.7% per year also exceeds the Australian market average of 5.4%, it doesn’t reach the high growth benchmark of over 20%. Additionally, a projected return on equity of 21.7% in three years suggests strong potential for efficient capital management.
Lovisa Holdings
Overview: Lovisa Holdings Limited is a retailer specializing in fashion jewelry and accessories, with a market capitalization of approximately A$3.43 billion.
Operations: The company generates its revenue primarily from the retail sale of fashion jewelry and accessories, totaling approximately A$654 million.
Estimated Discount To Fair Value: 32.6%
Lovisa Holdings, trading at A$32.15, is valued below its estimated fair value of A$47.67, indicating a significant undervaluation based on cash flows. Forecasted to grow earnings by 19.23% annually, Lovisa's projected growth outstrips the Australian market's 13.7%. Additionally, its revenue growth rate of 14.3% annually surpasses the market average of 5.4%. Despite these positives, its earnings growth does not meet the high-growth threshold of over 20% per year.
Treasury Wine Estates
Overview: Treasury Wine Estates Limited is a global wine company with operations across Australia, New Zealand, Asia, Europe, the UK, the Middle East, Africa, and the Americas, boasting a market capitalization of approximately A$9.73 billion.
Operations: The company's revenue is primarily generated through three segments: Penfolds at A$893.30 million, Treasury Americas at A$825.40 million, and Treasury Premium Brands at A$768.30 million.
Estimated Discount To Fair Value: 41.4%
Treasury Wine Estates (TWE) is projected to outpace the Australian market with its revenue expected to increase by 10.1% annually, compared to the market's 5.4%. Earnings are also set to rise significantly at a rate of 22.5% per year over the next three years. However, challenges include a dividend coverage issue, as current payouts are not well supported by earnings or cash flows. Additionally, TWE has experienced shareholder dilution and declining profit margins year-over-year, alongside significant one-off items affecting financial results. Recently, TWE expanded its distribution in China through an exclusive agreement with Season Global Trading for its Penfolds Champagne series, potentially boosting future revenues.
Delve into the full analysis health report here for a deeper understanding of Treasury Wine Estates.
Turning Ideas Into Actions
Get an in-depth perspective on all 48 Undervalued ASX Stocks Based On Cash Flows by using our screener here.
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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.
Companies discussed in this article include ASX:FLT ASX:LOV and ASX:TWE.
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