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The Canadian market has shown resilience, with the TSX only down 4% from its record high, buoyed by a strong performance in the materials sector. As markets navigate between past lows and highs amid global trade developments, investors may find opportunities in stocks that appear undervalued relative to their intrinsic value estimates. Identifying such stocks requires careful consideration of their fundamentals and potential for growth within the current economic landscape.
Top 10 Undervalued Stocks Based On Cash Flows In Canada
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| Propel Holdings (TSX:PRL) | CA$27.05 | CA$45.33 | 40.3% |
| K92 Mining (TSX:KNT) | CA$12.59 | CA$24.79 | 49.2% |
| Computer Modelling Group (TSX:CMG) | CA$7.88 | CA$10.87 | 27.5% |
| Savaria (TSX:SIS) | CA$17.28 | CA$30.98 | 44.2% |
| Docebo (TSX:DCBO) | CA$43.76 | CA$78.15 | 44% |
| illumin Holdings (TSX:ILLM) | CA$1.93 | CA$3.65 | 47.1% |
| Lithium Royalty (TSX:LIRC) | CA$5.10 | CA$9.05 | 43.7% |
| AtkinsRéalis Group (TSX:ATRL) | CA$68.05 | CA$112.71 | 39.6% |
| Teck Resources (TSX:TECK.B) | CA$48.77 | CA$62.96 | 22.5% |
| CAE (TSX:CAE) | CA$33.79 | CA$64.58 | 47.7% |
Here's a peek at a few of the choices from the screener.
Computer Modelling Group
Overview: Computer Modelling Group Ltd. is a software and consulting technology company that develops and licenses reservoir simulation and seismic interpretation software, with a market cap of CA$651.24 million.
Operations: The company's revenue segments include Seismic Solutions, generating CA$37.62 million, and Reservoir & Production Solutions, contributing CA$90.44 million.
Estimated Discount To Fair Value: 27.5%
Computer Modelling Group's recent earnings report shows a promising increase in net income, with CAD 9.61 million for the third quarter compared to CAD 5.61 million a year ago. The stock is trading at CA$7.88, significantly below its estimated fair value of CA$10.87, indicating it may be undervalued based on cash flows. Analysts expect earnings to grow at 28.6% annually, outpacing the Canadian market's growth rate of 16.7%.
K92 Mining
Overview: K92 Mining Inc. is involved in the exploration and development of mineral deposits in Papua New Guinea, with a market cap of CA$3.01 billion.
Operations: The company's revenue is primarily generated from the Kainantu Project, which amounted to $350.62 million.