ASX Stocks That May Be Undervalued In September 2024
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The Australian market has climbed 1.2% in the last 7 days and is up 11% over the past 12 months, with earnings expected to grow by 12% per annum over the next few years. In this favorable environment, identifying undervalued stocks can offer significant opportunities for investors looking to capitalize on potential growth.
Top 10 Undervalued Stocks Based On Cash Flows In Australia
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| Mader Group (ASX:MAD) | A$5.24 | A$10.43 | 49.7% |
| Hansen Technologies (ASX:HSN) | A$4.37 | A$8.20 | 46.7% |
| MLG Oz (ASX:MLG) | A$0.64 | A$1.18 | 45.8% |
| Ansell (ASX:ANN) | A$30.59 | A$56.98 | 46.3% |
| Charter Hall Group (ASX:CHC) | A$15.87 | A$29.37 | 46% |
| Genesis Minerals (ASX:GMD) | A$2.17 | A$4.01 | 45.9% |
| Little Green Pharma (ASX:LGP) | A$0.085 | A$0.17 | 49.8% |
| Millennium Services Group (ASX:MIL) | A$1.145 | A$2.24 | 48.9% |
| Clover (ASX:CLV) | A$0.38 | A$0.72 | 47.3% |
| Ai-Media Technologies (ASX:AIM) | A$0.73 | A$1.42 | 48.5% |
Let's dive into some prime choices out of the screener.
Codan
Overview: Codan Limited (ASX:CDA) develops technology solutions for various clients including United Nations organizations, security and military groups, government departments, individuals, and small-scale miners, with a market cap of A$2.69 billion.
Operations: Codan's revenue segments include A$326.91 million from Communications and A$219.85 million from Metal Detection.
Estimated Discount To Fair Value: 17.2%
Codan Limited appears undervalued based on cash flows, trading at A$14.84, which is 17.2% below its estimated fair value of A$17.92. The company reported strong financial results for the year ending June 30, 2024, with sales rising to A$550.46 million from A$456.5 million and net income increasing to A$81.39 million from A$67.7 million the previous year. Earnings are forecast to grow at 16.8% per year, outpacing the Australian market's expected growth of 12%.
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The analysis detailed in our Codan growth report hints at robust future financial performance.
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Get an in-depth perspective on Codan's balance sheet by reading our health report here.
IDP Education
Overview: IDP Education Limited facilitates student placements into educational institutions across Australia, the United Kingdom, the United States, Canada, New Zealand, and Ireland and has a market cap of A$4.48 billion.
Operations: Revenue from educational services and training for IDP Education Limited totals A$1.04 billion.
Estimated Discount To Fair Value: 41.7%
IDP Education Limited is trading at A$16.10, significantly below its estimated fair value of A$27.62, suggesting it may be undervalued based on cash flows. Despite a decline in net income to A$132.75 million from A$148.52 million last year, earnings are forecast to grow at 14% per year, outpacing the Australian market's 12.3%. Revenue growth is also expected to exceed the market average (7.4% vs 5.3%).