The market has climbed 2.1% in the last 7 days, led by the Financials sector with a gain of 2.4%. Over the past 12 months, the market is up 11%, and earnings are forecast to grow by 13% annually. In this favorable environment, identifying undervalued stocks can be a strategic move for investors looking to capitalize on potential growth opportunities.

Top 10 Undervalued Stocks Based On Cash Flows In Australia

Click here to see the full list of 38 stocks from our Undervalued ASX Stocks Based On Cash Flows screener.

We're going to check out a few of the best picks from our screener tool.

Ansell

Overview: Ansell Limited (ASX:ANN) operates globally in designing, sourcing, developing, manufacturing, distributing, and selling hand and body protection solutions with a market cap of A$4.20 billion.

Operations: Ansell's revenue segments include Healthcare at $834.20 million and Industrial (Including Specialty Markets) at $785.10 million.

Estimated Discount To Fair Value: 49.1%

Ansell Limited's recent earnings report revealed a decline in net income to US$76.5 million from US$148.3 million the previous year, with profit margins dropping to 4.7% from 9%. Despite this, the stock is trading at A$29.05, significantly below its estimated fair value of A$57.05 based on discounted cash flow analysis, suggesting it is undervalued by over 20%. Earnings are forecasted to grow at 22.2% annually, outpacing the Australian market's growth rate of 13.3%.

• The growth report we've compiled suggests that Ansell's future prospects could be on the up.

• Click to explore a detailed breakdown of our findings in Ansell's balance sheet health report.

Judo Capital Holdings

Overview: Judo Capital Holdings Limited (ASX:JDO) provides banking products and services to small and medium businesses in Australia, with a market cap of A$1.70 billion.

Operations: Judo Capital Holdings generates A$326.60 million in revenue from its banking segment, offering financial products and services to small and medium businesses in Australia.

Estimated Discount To Fair Value: 29.3%

Judo Capital Holdings is trading at A$1.54, significantly below its estimated fair value of A$2.17, indicating it is undervalued by over 20%. The company’s earnings are forecast to grow significantly at 26% per year, outpacing the Australian market's growth rate of 13.3%. Despite a high level of bad loans (2.8%) and low allowance for bad loans (50%), Judo’s revenue is expected to grow faster than the market at 17.2% annually.

• Our expertly prepared growth report on Judo Capital Holdings implies its future financial outlook may be stronger than recent results.

• Unlock comprehensive insights into our analysis of Judo Capital Holdings stock in this financial health report.

Superloop

Overview: Superloop Limited, with a market cap of A$901.93 million, operates as a telecommunications and internet service provider in Australia.

Operations: Superloop Limited generates revenue through three primary segments: Consumer (A$90.3 million), Business (A$100.2 million), and Wholesale (A$60.5 million).

Estimated Discount To Fair Value: 45.7%

Superloop is trading at A$1.80, significantly below its estimated fair value of A$3.31, indicating it is undervalued by over 45%. The company reported sales of A$416.6 million for the year ending June 30, 2024, up from A$323.5 million the previous year, and reduced its net loss to A$14.7 million from A$43.2 million. Revenue is forecast to grow at 15.2% annually, outpacing the Australian market's growth rate of 5.4%.

• According our earnings growth report, there's an indication that Superloop might be ready to expand.

• Click here and access our complete balance sheet health report to understand the dynamics of Superloop.

Turning Ideas Into Actions

• Unlock more gems! Our Undervalued ASX Stocks Based On Cash Flows screener has unearthed 35 more companies for you to explore.Click here to unveil our expertly curated list of 38 Undervalued ASX Stocks Based On Cash Flows.

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Looking For Alternative Opportunities?

• Explore high-performing small cap companies that haven't yet garnered significant analyst attention.

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• 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.

Companies discussed in this article include ASX:ANN ASX:JDO and ASX:SLC.

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