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With Canada's recent election removing a source of uncertainty, the focus has shifted to addressing key economic issues such as trade and fiscal policy. As the Canadian market navigates these evolving conditions, investors may find opportunities in stocks that are trading at a discount, offering potential value amidst current challenges and uncertainties.
Top 10 Undervalued Stocks Based On Cash Flows In Canada
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| Badger Infrastructure Solutions (TSX:BDGI) | CA$40.39 | CA$76.05 | 46.9% |
| Docebo (TSX:DCBO) | CA$43.88 | CA$79.08 | 44.5% |
| Savaria (TSX:SIS) | CA$17.98 | CA$30.20 | 40.5% |
| Enterprise Group (TSX:E) | CA$1.61 | CA$2.82 | 42.9% |
| VersaBank (TSX:VBNK) | CA$15.46 | CA$30.63 | 49.5% |
| Lithium Royalty (TSX:LIRC) | CA$5.39 | CA$8.37 | 35.6% |
| A & W Food Services of Canada (TSX:AW) | CA$32.51 | CA$61.23 | 46.9% |
| AtkinsRéalis Group (TSX:ATRL) | CA$70.58 | CA$112.73 | 37.4% |
| Obsidian Energy (TSX:OBE) | CA$5.44 | CA$8.59 | 36.7% |
| CAE (TSX:CAE) | CA$35.10 | CA$57.26 | 38.7% |
Let's explore several standout options from the results in the screener.
Cineplex
Overview: Cineplex Inc., along with its subsidiaries, operates as an entertainment and media company in Canada and internationally, with a market cap of CA$656.47 million.
Operations: The company's revenue segments include Media at CA$133.80 million, Location-Based Entertainment at CA$128.62 million, and Film Entertainment and Content at CA$1.07 billion.
Estimated Discount To Fair Value: 10.8%
Cineplex is trading at CA$9.85, below its estimated fair value of CA$11.04, making it an undervalued stock based on cash flows. Despite recent challenges, including a net loss of CA$37.68 million in 2024 and declining box office revenues in early 2025, Cineplex's revenue is forecast to grow faster than the Canadian market at 5.8% annually. Analysts expect profitability within three years, with earnings projected to grow significantly each year.
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The growth report we've compiled suggests that Cineplex's future prospects could be on the up.
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Get an in-depth perspective on Cineplex's balance sheet by reading our health report here.
Obsidian Energy
Overview: Obsidian Energy Ltd. is involved in the exploration, development, and production of oil and natural gas properties in Western Canada, with a market cap of CA$424.42 million.
Operations: The company's revenue from its oil and gas exploration and production segment is CA$731.20 million.
Estimated Discount To Fair Value: 36.7%
Obsidian Energy, trading at CA$5.44, is undervalued based on cash flows with an estimated fair value of CA$8.59. The company is expected to become profitable in three years, with earnings growth forecasted at a very large rate annually. Recent debt financing reduced its credit facility usage to CA$30 million, and the share repurchase program aims to buy back 9.7% of outstanding shares by March 2026, enhancing shareholder value amidst robust revenue growth projections surpassing the Canadian market average.