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As the Canadian TSX index has rebounded by over 5% amid easing inflation and better-than-expected economic data, investors are keenly watching how central banks' rate-cutting cycles will unfold. In this environment, identifying undervalued stocks becomes crucial as markets anticipate further positive sentiment and potential broadening of market leadership.
Top 10 Undervalued Stocks Based On Cash Flows In Canada
Name | Current Price | Fair Value (Est) | Discount (Est) |
goeasy (TSX:GSY) | CA$183.79 | CA$358.37 | 48.7% |
Alvopetro Energy (TSXV:ALV) | CA$5.10 | CA$9.07 | 43.8% |
Computer Modelling Group (TSX:CMG) | CA$12.61 | CA$22.25 | 43.3% |
Kinaxis (TSX:KXS) | CA$150.58 | CA$282.43 | 46.7% |
Obsidian Energy (TSX:OBE) | CA$9.14 | CA$18.08 | 49.4% |
Africa Oil (TSX:AOI) | CA$2.04 | CA$3.70 | 44.9% |
Calibre Mining (TSX:CXB) | CA$2.31 | CA$4.59 | 49.6% |
Viemed Healthcare (TSX:VMD) | CA$10.45 | CA$20.08 | 48% |
NFI Group (TSX:NFI) | CA$19.19 | CA$37.54 | 48.9% |
NanoXplore (TSX:GRA) | CA$2.17 | CA$4.19 | 48.3% |
Below we spotlight a couple of our favorites from our exclusive screener.
GFL Environmental
Overview: GFL Environmental Inc. provides non-hazardous solid waste management and environmental services in Canada and the United States, with a market cap of CA$21.51 billion.
Operations: The company's revenue segments include CA$4.79 billion from Solid Waste in the USA, CA$2.16 billion from Solid Waste in Canada, and CA$1.67 billion from Environmental Services.
Estimated Discount To Fair Value: 31.6%
GFL Environmental is trading at CA$57.42, significantly below its estimated fair value of CA$83.99, suggesting it is undervalued based on cash flows. Despite a recent net loss of CAD 471.2 million in Q2 2024, the company has raised its revenue guidance for the year to between $7.90 billion and $7.93 billion following a divestiture impact. GFL's earnings are forecast to grow substantially over the next three years, indicating potential future profitability and investment appeal despite current challenges.
Triple Flag Precious Metals
Overview: Triple Flag Precious Metals Corp. is a company focused on acquiring and managing precious metals streams, royalties, and other mineral interests across various countries, with a market cap of CA$4.50 billion.
Operations: The company generates $222.27 million from acquiring and managing precious metal and other high-quality streams and royalties.