3 ASX Stocks That May Be Trading Below Their Estimated Value
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The Australian stock market has recently experienced a mix of gains and losses, with the ASX200 closing up 0.56% at 8164 points, driven by strong performances in IT and Utilities sectors. However, the turbulence within certain industries, such as Energy and Materials, highlights the importance of identifying stocks that may be trading below their estimated value. In this environment, finding stocks that are potentially undervalued requires careful consideration of their fundamentals and sector performance amidst current market conditions.
Top 10 Undervalued Stocks Based On Cash Flows In Australia
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| Regal Partners (ASX:RPL) | A$3.56 | A$6.50 | 45.2% |
| DUG Technology (ASX:DUG) | A$1.845 | A$3.49 | 47.2% |
| Ansell (ASX:ANN) | A$30.91 | A$58.03 | 46.7% |
| MLG Oz (ASX:MLG) | A$0.62 | A$1.15 | 46.3% |
| Audinate Group (ASX:AD8) | A$8.99 | A$17.81 | 49.5% |
| Megaport (ASX:MP1) | A$6.81 | A$13.42 | 49.3% |
| IDP Education (ASX:IEL) | A$13.99 | A$27.38 | 48.9% |
| Millennium Services Group (ASX:MIL) | A$1.145 | A$2.24 | 48.9% |
| Structural Monitoring Systems (ASX:SMN) | A$0.69 | A$1.27 | 45.7% |
| Energy One (ASX:EOL) | A$5.65 | A$11.07 | 48.9% |
We'll examine a selection from our screener results.
Gold Road Resources
Overview: Gold Road Resources Limited, with a market cap of A$2.14 billion, is involved in the exploration of gold properties in Western Australia through its subsidiaries.
Operations: The company generates revenue from its Development and Production segment, amounting to A$454.82 million.
Estimated Discount To Fair Value: 37.6%
Gold Road Resources is trading at A$1.98, significantly below its estimated fair value of A$3.17, suggesting it may be undervalued based on cash flows. Earnings are forecast to grow at 20.9% annually, outpacing the Australian market's growth rate of 12.3%. Despite a recent decline in sales and net income for the half-year ending June 2024, strong future earnings projections and potential M&A activity could enhance its valuation appeal further.
PolyNovo
Overview: PolyNovo Limited designs, manufactures, and sells biodegradable medical devices in the United States, Australia, New Zealand, and internationally with a market cap of A$1.40 billion.
Operations: The company generates revenue of A$103.23 million from the development, manufacturing, and commercialization of the NovoSorb technology.