Three Undervalued Stocks With Estimated Discounts Ranging From 13.7% To 35.9%
As global markets exhibit mixed signals with some indices reaching record highs and others showing contraction, investors are navigating through a landscape marked by fluctuating interest rates and economic indicators. In this context, identifying undervalued stocks becomes crucial as they may offer potential for appreciation in a market where growth has been narrowly driven and certain sectors may be poised for recovery.
Top 10 Undervalued Stocks Based On Cash Flows
Name | Current Price | Fair Value (Est) | Discount (Est) |
Hibino (TSE:2469) | ¥2600.00 | ¥5188.77 | 49.9% |
Anhui Anli Material Technology (SZSE:300218) | CN¥13.30 | CN¥26.59 | 50% |
Sparebanken Vest (OB:SVEG) | NOK131.68 | NOK262.87 | 49.9% |
Revu (KOSDAQ:A443250) | ₩10320.00 | ₩20628.32 | 50% |
Arcadis (ENXTAM:ARCAD) | €59.30 | €117.91 | 49.7% |
Hexatronic Group (OM:HTRO) | SEK53.08 | SEK105.89 | 49.9% |
Musti Group Oyj (HLSE:MUSTI) | €26.80 | €53.36 | 49.8% |
Yara International (OB:YAR) | NOK294.90 | NOK589.44 | 50% |
YIT Oyj (HLSE:YIT) | €2.332 | €4.66 | 49.9% |
Beijing Aosaikang Pharmaceutical (SZSE:002755) | CN¥9.49 | CN¥18.84 | 49.6% |
Underneath we present a selection of stocks filtered out by our screen
Turkiye Garanti Bankasi
Overview: Turkiye Garanti Bankasi A.S. offers a range of banking products and services across Turkey, with a market capitalization of approximately TRY 514.08 billion.
Operations: The bank's revenue is primarily derived from Corporate and Commercial Banking, which generated TRY 95.05 billion, and Retail Banking with TRY 75.02 billion in revenues.
Estimated Discount To Fair Value: 13.7%
Turkiye Garanti Bankasi, trading at TRY122.4, is valued below our estimated fair value of TRY141.83, reflecting a modest undervaluation based on discounted cash flows. The bank has demonstrated robust financial performance with a net income increase to TRY 22.29 billion in Q1 2024 from TRY 15.37 billion the previous year, supporting its strong earnings growth forecast of 26% annually. Despite this potential, its dividend reliability remains uncertain due to an unstable track record. Additionally, plans to issue up to US$2 billion in debt could impact future valuations depending on market conditions and execution.
Ryanair Holdings
Overview: Ryanair Holdings plc operates as a scheduled-passenger airline in Ireland, the UK, Spain, Italy, and other international locations, with a market capitalization of approximately €18.96 billion.
Operations: The company generates revenue primarily through its scheduled-passenger airline services, with Ryanair DAC contributing €14.08 billion and Other Airlines adding €1.47 billion.
Estimated Discount To Fair Value: 26.3%
Ryanair Holdings, priced at €16.83, is significantly undervalued compared to its fair value of €22.83, reflecting more than 20% potential upside based on discounted cash flow analysis. The company has shown a strong growth trajectory with earnings increasing by 30.5% annually over the past five years and revenues projected to grow at 7.1% annually, outpacing the Irish market forecast of 4.2%. Despite this robust financial performance and positive analyst expectations for a price increase of 44.3%, Ryanair's dividend track record remains unstable, and its share price has been highly volatile recently.
Royal Gold
Overview: Royal Gold, Inc., along with its subsidiaries, specializes in acquiring and managing precious metal streams, royalties, and related interests, boasting a market capitalization of approximately $8.61 billion.
Operations: The company generates revenue primarily through stream interests, which contributed approximately $405.82 million, and royalty interests, which added about $171.12 million.
Estimated Discount To Fair Value: 35.9%
Royal Gold, trading at US$131, appears undervalued by over 20% against an estimated fair value of US$204.44 based on discounted cash flow analysis. Despite a recent dip in quarterly earnings from US$63.88 million to US$47.17 million and sales from US$168.4 million to US$147.45 million, the company is poised for substantial growth with expected revenue and earnings increases of 13.2% and 20.3% annually respectively—outstripping broader market projections. This financial trajectory suggests potential for significant appreciation despite current underperformance in return on equity forecasts at just 12.7%.
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.
Companies discussed in this article include IBSE:GARANISE:RYA and NasdaqGS:RGLD
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