Exploring value opportunities with 3 ASX stocks in June 2024

On a turbulent trading day, with the ASX200 retreating after an initial rise and US markets retreating, investors are keenly looking for opportunities. In such a market environment, identifying undervalued stocks can be particularly interesting as they may offer growth potential despite general market volatility. When assessing what makes a good stock in current conditions, factors such as resilience in fluctuating markets and sectors that show relative strength are key considerations.

The 10 most undervalued stocks in Australia based on cash flows

Click here to see the full list of 47 stocks from our Undervalued ASX Stocks Based on Cash Flows screener.

Let’s review some notable picks from our reviewed stocks

Overview: Infomedia Ltd is a technology company that provides electronic parts catalogues, service quote creation software and e-commerce solutions to the global automotive industry and has a market capitalization of approximately A$624.62 million.

Operations: The company generates its revenue primarily through the publication of magazines, which generate AUD 136.58 million.

Estimated discount to fair value: 36.7%

Infomedia is considered undervalued at A$1.67, with a fair value estimated at A$2.63, a discount of 36.7%. This valuation comes despite expectations of significant earnings growth of 27.83% annually, which exceeds the Australian market forecast of 13.7%. However, revenue growth forecasts of 7.9% annually are modest compared to some higher-growth peers. Recent activity includes presentations at the Bell Potter Emerging Leaders Conference and upcoming discussions on operations in the Americas, which could impact future financial performance.

Overview: SiteMinder Limited is a company that develops, markets and sells online guest acquisition platforms and commerce solutions for accommodation providers in Australia and internationally and has a market capitalisation of approximately A$1.42 billion.

Operations: SiteMinder’s revenue comes primarily from the software and programming segment and generates A$171.70 million.

Estimated discount to fair value: 38.5%

SiteMinder currently trades at A$5.13, below its estimated fair value of A$8.35, indicating significant undervaluation. The company’s revenue growth is robust at 19.7% annually, outpacing the Australian market average of 5.5%. The company is expected to become profitable within three years, with earnings growing at 72.7% annually. SiteMinder recently entered into a strategic partnership with Cloudbeds to improve its sales and operational capabilities for hoteliers, potentially increasing future revenue and market position.

Overview: Worley Limited operates globally and provides professional project and asset services to the energy, chemicals and natural resources industries. Its market capitalization is approximately A$7.52 billion.

Operations: The Company’s revenue segments total approximately A$11.34 billion and are primarily derived from professional project and facility services in the energy, chemicals and raw materials sectors.

Estimated discount to fair value: 37.7%

Worley is significantly undervalued with an estimated fair value of A$14.25, trading 37.7% below that level. Its earnings are expected to grow 22.6% annually, beating the Australian market forecast of 13.8%. Although revenue growth is estimated at 6.3% per year, slightly above the market average of 5.5%, its future return on equity is considered low at 9.8%. Worley recently partnered with Nano One to advance clean energy technology in battery production.

Where to now?

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This Simply Wall St article is of a general nature. We provide commentary based solely on historical data and analyst forecasts, using an unbiased methodology. Our articles are not intended as financial advice. They do not constitute a recommendation to buy or sell stocks, and do not take into account your objectives or financial situation. Our goal is to provide you with long-term analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative materials. Simply Wall St does not hold any of the stocks mentioned.

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