Yahoo Finance Top TSX Stocks Estimated To Be Undervalued In September 2024
The Canadian market has experienced increased volatility recently, driven by concerns over a slowing economy and persistent inflation. Despite these fluctuations, the broader picture reveals that stocks have maintained strong gains and are near record highs. In this environment, identifying undervalued stocks can be particularly advantageous for investors looking to capitalize on potential growth opportunities amidst market swings.
Top 10 Undervalued Stocks Based On Cash Flows In Canada
Name | Current Price | Fair Value (Est) | Discount (Est) |
Computer Modelling Group (TSX:CMG) | CA$11.62 | CA$22.16 | 47.6% |
Savaria (TSX:SIS) | CA$21.20 | CA$41.29 | 48.7% |
Kinaxis (TSX:KXS) | CA$154.47 | CA$282.41 | 45.3% |
Calian Group (TSX:CGY) | CA$45.23 | CA$72.60 | 37.7% |
Viemed Healthcare (TSX:VMD) | CA$10.45 | CA$20.08 | 48% |
Bragg Gaming Group (TSX:BRAG) | CA$6.67 | CA$10.68 | 37.6% |
Endeavour Mining (TSX:EDV) | CA$33.05 | CA$56.21 | 41.2% |
Blackline Safety (TSX:BLN) | CA$5.47 | CA$10.20 | 46.4% |
Boyd Group Services (TSX:BYD) | CA$210.94 | CA$340.24 | 38% |
Opsens (TSX:OPS) | CA$2.90 | CA$4.64 | 37.5% |
Let's review some notable picks from our screened stocks.
Advantage Energy
Overview: Advantage Energy Ltd. operates in the acquisition, exploitation, development, and production of natural gas, crude oil, and natural gas liquids (NGLs) in Alberta, Canada with a market cap of CA$1.52 billion.
Operations: Advantage Energy generates revenue primarily from its Advantage Oil & Gas Ltd. segment, which reported CA$501.15 million.
Estimated Discount To Fair Value: 12.8%
Advantage Energy Ltd. appears undervalued based on cash flows, trading at CA$9.01 below its estimated fair value of CA$10.33, with earnings expected to grow significantly over the next three years at 30.5% annually, outpacing the Canadian market's 15.3%. Despite a recent net loss and high debt levels, revenue growth is forecasted at 22% per year, driven by outperforming recently acquired assets and revised production guidance for 2024-2025.
Constellation Software
Overview: Constellation Software Inc., with a market cap of CA$90.84 billion, acquires, builds, and manages vertical market software businesses in Canada, the United States, Europe, and internationally.
Operations: Constellation Software's revenue from the Software & Programming segment is $9.27 billion.
Estimated Discount To Fair Value: 21.7%
Constellation Software is trading at CA$4355.41, significantly below its estimated fair value of CA$5559.05, suggesting it is undervalued based on discounted cash flow analysis. Recent earnings reports show robust growth with Q2 revenue at US$2.47 billion and net income at US$177 million, up from the previous year. Despite high debt levels, earnings are forecast to grow 23.55% annually over the next three years, outpacing the Canadian market's growth rate of 15.3%.
Ivanhoe Mines
Overview: Ivanhoe Mines Ltd. is involved in the mining, development, and exploration of minerals and precious metals primarily in Africa, with a market cap of CA$23.74 billion.
Operations: Ivanhoe Mines generates revenue primarily from the mining, development, and exploration of minerals and precious metals in Africa.
Estimated Discount To Fair Value: 25.8%
Ivanhoe Mines, trading at CA$17.84, is significantly undervalued based on discounted cash flow analysis with an estimated fair value of CA$24.04. Recent developments include a memorandum of understanding with Zambia's Ministry of Mines to commence exploration activities and record production levels at the Kamoa-Kakula Copper Complex in the DRC. Despite recent insider selling and a slight dip in earnings, revenue and profit are forecast to grow significantly faster than the Canadian market over the next three years.
Key Takeaways
Click here to access our complete index of 27 Undervalued TSX Stocks Based On Cash Flows.
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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 TSX:AAV TSX:CSU and TSX:IVN.
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