Flight Centre Travel Group and 2 other ASX shares valued below their intrinsic value
The Australian share market has seen a slight decline of 1.4% over the past week, but is up 6.5% over the past year and earnings are expected to grow 13% annually. In such a volatile environment, identifying potentially undervalued stocks can present opportunities for investors looking for value in a growing market.
The 10 most undervalued stocks in Australia based on cash flows
Surname |
Current price |
Fair value (estimated) |
Discount (estimated) |
GTN (ASX:GTN) |
0.445€ |
0,85 € |
47.4% |
MaxiPARTS (ASX:MXI) |
2.04 A$ |
3,94 € |
48.2% |
ReadyTech Holdings (ASX:RDY) |
3,25 € |
6,26 € |
48% |
Australian Clinical Laboratories (ASX:ACL) |
2,48 € |
4,73 € |
47.5% |
Strike Energy (ASX:STX) |
0.225 A$ |
0,45 € |
50.3% |
IPH (ASX:IPH) |
6,25 € |
12,00 € |
47.9% |
Regal Partners (ASX:RPL) |
3,29 € |
6,18 € |
46.8% |
Core Lithium (ASX:CXO) |
0.085 A$ |
0,17 € |
49.5% |
Millennium Services Group (ASX:MIL) |
1,145 € |
2,24 € |
48.9% |
SiteMinder (ASX:SDR) |
5,20 € |
10.02 A$ |
48.1% |
Click here to see the full list of 49 stocks from our Undervalued ASX Stocks Based on Cash Flows screener.
Let’s review some notable picks from our reviewed stocks
Overview: Flight Centre Travel Group Limited is a travel retailer serving both the leisure and corporate sectors in regions including Australia, New Zealand, the Americas, Europe, the Middle East, Africa and Asia and has a market capitalisation of approximately A$4.54 billion.
Operations: The company’s revenue comes primarily from its leisure and business travel businesses, generating A$1.28 billion and A$1.06 billion respectively.
Estimated discount to fair value: 19.7%
Flight Centre Travel Group (FLT) is trading at A$20.63, below our estimated fair value of A$25.62, suggesting potential undervaluation. FLT has recently posted earnings and is expected to grow 18.8% annually, beating the Australian market forecast of 13%. Despite this growth, revenue growth of 9.7% annually exceeds the market’s 5.2% but does not reach high growth thresholds. With a forecast high return on equity of 21.8% over three years, FLT combines solid profitability prospects with moderate undervaluation based on cash flows.
Overview: HMC Capital Limited operates in Australia and manages real estate funds with a market capitalization of approximately A$2.63 billion.
Operations: The company manages real estate-focused funds and has revenues of approximately A$80.29 million.
Estimated discount to fair value: 43.1%
HMC Capital appears to be undervalued at a current price of A$7.14 against an estimated fair value of A$12.55, which represents a significant discount. The company’s revenue growth is robust at 20.1% annually, outperforming the Australian market at 5.2%. Despite recent shareholder dilution through several share offerings totaling A$188.30 million, HMC’s earnings are expected to grow at 16.9% annually, outperforming the market average of 13%. However, the forecast return on equity in three years is relatively low at 10.5%.
Overview: Judo Capital Holdings Limited operates in Australia and offers a range of banking products and services tailored to small and medium-sized businesses. The company has a market capitalization of approximately A$1.38 billion.
Operations: The company generates its revenue primarily from its banking business and totals AUD 328.70 million.
Estimated discount to fair value: 10.3%
Judo Capital Holdings is trading at A$1.24, below its calculated fair value of A$1.38. While revenue growth is estimated at 16.6% annually, outperforming the Australian market average of 5.2%, earnings are expected to grow at 26.32% annually, also above the national trend of 13%. Judo was recently added to the S&P/ASX 200 Index and shows potential despite a modest forecast return on equity of 10.1% over three years and a valuation that is not significantly undervalued on a discounted cash flow basis.
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This Simply Wall St article is of a general nature. We comment 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.
Companies discussed in this article include ASX:FLT, ASX:HMC and ASX:JDO.
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