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Amidst a mixed performance in global markets and a slight dip anticipated for Australian shares, investors are keeping an eye on the ASX as it navigates through economic uncertainties. In such conditions, identifying undervalued stocks can be crucial, as they may offer potential upside when trading below intrinsic value estimates.
Top 10 Undervalued Stocks Based On Cash Flows In Australia
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| Acrow (ASX:ACF) | A$1.07 | A$2.01 | 46.7% |
| Domino's Pizza Enterprises (ASX:DMP) | A$26.73 | A$51.87 | 48.5% |
| Nido Education (ASX:NDO) | A$0.82 | A$1.59 | 48.3% |
| Champion Iron (ASX:CIA) | A$5.20 | A$9.21 | 43.6% |
| Kinatico (ASX:KYP) | A$0.175 | A$0.34 | 49.1% |
| Lotus Resources (ASX:LOT) | A$0.20 | A$0.39 | 48.7% |
| SciDev (ASX:SDV) | A$0.425 | A$0.82 | 47.9% |
| Charter Hall Group (ASX:CHC) | A$16.90 | A$31.98 | 47.2% |
| South32 (ASX:S32) | A$3.53 | A$6.42 | 45% |
| ReadyTech Holdings (ASX:RDY) | A$2.61 | A$5.11 | 48.9% |
We're going to check out a few of the best picks from our screener tool.
Adriatic Metals
Overview: Adriatic Metals PLC, through its subsidiaries, focuses on the exploration and development of precious and base metals, with a market cap of A$1.54 billion.
Operations: Adriatic Metals PLC generates revenue primarily through its activities in the exploration and development of precious and base metals.
Estimated Discount To Fair Value: 42.3%
Adriatic Metals is trading at A$4.47, significantly below its estimated fair value of A$7.75, suggesting it may be undervalued based on cash flows. The company is expected to become profitable within three years with revenue growth forecasted at 43.1% annually, outpacing the Australian market's average. Recent equity offerings raised approximately A$80 million, potentially supporting future growth initiatives and enhancing cash flow prospects despite current low revenue levels of US$243K.
Mader Group
Overview: Mader Group Limited is a contracting company that offers specialist technical services in the mining, energy, and industrial sectors both in Australia and internationally, with a market capitalization of A$1.20 billion.
Operations: The company generates revenue primarily through its Staffing & Outsourcing Services segment, which accounts for A$811.54 million.
Estimated Discount To Fair Value: 25.1%
Mader Group, trading at A$5.92, is valued below its estimated fair value of A$7.90, highlighting potential undervaluation based on cash flows. The company reaffirmed its fiscal year 2025 guidance with expected revenue of at least A$870 million and NPAT of at least A$57 million. Recent earnings showed sales growth to A$411.5 million for the half-year ended December 31, 2024, with net income rising to A$26.01 million from the previous year’s figures.