Examination of three leading stocks whose actual value is up to 47.7% below the calculated values

With global markets showing mixed performance and major indices such as the S&P 500 and Nasdaq Composite showing divergent trends, investors continue to navigate an environment marked by economic updates and policy adjustments. In such an environment, identifying stocks that appear undervalued relative to their intrinsic value could present potential opportunities for sophisticated investors.

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Overview: Cellnex Telecom, SA manages wireless telecommunications infrastructure in several European countries, including Austria, Denmark, Spain and the United Kingdom, with a market capitalization of approximately EUR 22.09 billion.

Operations: The company operates and manages wireless telecommunications infrastructure in several European countries, including Austria, Denmark, Spain, France, Ireland, Italy, the Netherlands, Poland, Portugal, the United Kingdom, Sweden and Switzerland.

Estimated discount to fair value: 47.7%

Currently trading at €31.31, Cellnex Telecom is significantly undervalued based on a DCF analysis, with an estimated fair value of €59.83, representing an undervaluation of 47.7%. Despite a forecast of slow revenue growth of 5.9% annually – slightly above the Spanish market’s 4.7% – the company is expected to become profitable within three years, in contrast to its current net loss of €39 million in the first quarter of 2024, compared to €91 million last year. Recent strategic moves include the issuance of shares and several fixed income securities to strengthen its financial position.

Overview: Innovent Biologics, Inc. is a biopharmaceutical company focused on the development and commercialization of monoclonal antibodies and other drugs for oncology, ophthalmology, autoimmune, cardiovascular and metabolic diseases in China and has a market capitalization of approximately HK$60.24 billion.

Operations: The company’s sales amounted to 6.21 billion Chinese yen (approximately 121 million euros) and consist mainly of the biotechnology segment.

Estimated discount to fair value: 36.3%

Innovent Biologics is priced at HK$39.65, well below its estimated fair value of HK$62.28, which is a significant undervaluation based on DCF analysis. Despite recent insider selling and share dilution in the past year, the company’s earnings have grown 27.1% annually over the past five years and are expected to grow 50.81% annually. Revenue growth is also robust at 21.1% annually, outperforming the Hong Kong market at 7.7%. The recent positive Phase 3 trial results for Mazdutide could further improve the company’s financial outlook if it is approved for weight management in China.

Overview: Zijin Mining Group Company Limited is engaged in the exploration, mining, processing, refining and sale of gold, non-ferrous metals and other mineral resources both in mainland China and globally and has a market capitalization of approximately HK$504.78 billion.

Operations: The company generates revenue from the exploration, mining, processing and refining of gold and non-ferrous metals.

Estimated discount to fair value: 44.8%

Zijin Mining Group trades at HK$17.66 and is considered undervalued with an estimated fair value of HK$31.99 according to DCF analysis. The company’s revenue and earnings growth are expected to outperform the Hong Kong market at 9.1% and 20.6% per year, respectively. Despite high debt, the expected significant earnings growth and recent inclusion in the Hang Seng China Enterprises Index underscore the company’s potential at current market valuations.

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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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