3 stocks potentially trading up to 45.1% below their intrinsic value

As global markets celebrate the prospect of impending rate cuts and major indexes such as the Dow Jones Industrial Average and S&P 500 head toward record highs, investors are increasingly looking for ways to capitalize on undervalued stocks. In this environment, identifying stocks that may be trading below their intrinsic value can provide a strategic advantage.

The 10 most undervalued stocks based on cash flow

name	Current price	Fair value (estimated)	Discount (estimated)
Atour Lifestyle Holdings (NasdaqGS:ATAT)	16.52 US dollars	32.92 euros	49.8%
Funai Soken Holdings (TSE:9757)	2328.00 ¥	4642.68 ¥	49.9%
P/F Bakkafrost (OB:BAKKA)	577,50 NOK	1151,91 NOK	49.9%
Afya (NasdaqGS:AFYA)	17.29 US dollars	$34.49	49.9%
Burjeel Holdings (ADX:BURJEEL)	2.43 AED	4.85 AED	49.9%
California Resources (NYSE: CRC)	52.15 US dollars	103.93 euros	49.8%
Enento Group Oyj (HLSE:ENENTO)	18,22 €	36,36 €	49.9%
TORIDOLL Holdings (TSE:3397)	3700.00 ¥	¥7375.32	49.8%
Q Technology (Group) (SEHK:1478)	HK$4.86	9,69 €	49.8%
EVERTEC (NYSE:EVTC)	33.41 US dollars	66.51 US dollars	49.8%

Click here to see the full list of 986 stocks from our Undervalued Stocks Based on Cash Flow screener.

We’ll look at some of the best tips from our screener tool.

Overview: Goodman Group (ASX:GMG) is an integrated real estate group with operations in Australia, New Zealand, Asia, Europe, the UK and the Americas and a market capitalisation of A$63.29 billion.

Operations: Goodman Group’s revenue segments include property investment, property development and management services in Australia, New Zealand, Asia, Europe, the United Kingdom and the Americas.

Estimated discount to fair value: 12.6%

Goodman Group trades at A$33.11, below its estimated fair value of A$37.9, suggesting the company may be undervalued based on cash flows. Although a net loss of A$98.9 million was reported for the financial year ending June 30, 2024, revenue is expected to grow at 29.6% per year and earnings at 28.44% per year over the next three years, outperforming the market average and suggesting strong future cash flow potential despite recent setbacks.

Overview: Vertex, Inc. provides enterprise-wide tax technology solutions for the retail, wholesale, and manufacturing industries in the U.S. and internationally with a market capitalization of $5.93 billion.

Operations: The company’s revenue from software and programming is $617.83 million.

Estimated discount to fair value: 44.3%

Vertex, Inc. trades at $37.61, well below its estimated fair value of $67.54, indicating potential undervaluation based on cash flows. Recent earnings reports show a turnaround with net income of $5.16 million for Q2 2024 compared to a net loss last year and revenue growth from $139.7 million to $161.1 million year-over-year. Despite past shareholder dilution and significant insider selling, Vertex’s earnings are forecast to grow significantly at a CAGR of 38.9% over the next three years, outperforming the market average and supporting its undervalued status based on discounted cash flow analysis.

Overview: Proya Cosmetics Co., Ltd. is a beauty and personal care company that researches, develops, produces and sells cosmetics in China, with a market capitalization of CNY 33.89 billion.

Operations: Proya generates revenue through the research, development, production and sale of cosmetics in China.

Estimated discount to fair value: 45.1%

Proya Cosmetics Ltd. trades at CN¥90.72, well below its estimated fair value of CN¥165.1, suggesting an undervaluation based on cash flows. The latest half-year results show a strong performance with revenues of CN¥5 billion and net profit of CN¥701.67 million, up from last year’s figures. Forecasts call for earnings growth of 19.6% annually over the next three years, outperforming the market average and confirming the company’s status as undervalued despite an unstable dividend history and high non-cash earnings.

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This Simply Wall St article is of a general nature. We comment based solely on historical data and analyst forecasts, using an unbiased methodology. Our articles are not intended as financial advice. They do not constitute a recommendation to buy or sell stocks and do not take into account your objectives or financial situation. Our goal is to provide you with long-term analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative materials. Simply Wall St does not hold any of the stocks mentioned.

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