In This Article:
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%