ASX Stocks Including Elders That May Be Priced Below Their Estimated Value
As the ASX 200 hovers just above the 9,000-point mark, traders are cautiously assessing their next moves amid global economic events and domestic earnings reports. In this environment of uncertainty and potential profit-taking, identifying undervalued stocks can be a strategic approach for investors looking to capitalize on market inefficiencies.
|
Name |
Current Price |
Fair Value (Est) |
Discount (Est) |
|
Reckon (ASX:RKN) |
A$0.605 |
A$1.19 |
49.1% |
|
ReadyTech Holdings (ASX:RDY) |
A$2.76 |
A$5.07 |
45.6% |
|
PointsBet Holdings (ASX:PBH) |
A$1.255 |
A$2.13 |
41% |
|
Hillgrove Resources (ASX:HGO) |
A$0.037 |
A$0.073 |
49.4% |
|
Fenix Resources (ASX:FEX) |
A$0.305 |
A$0.51 |
39.8% |
|
Elders (ASX:ELD) |
A$7.57 |
A$14.04 |
46.1% |
|
Credit Clear (ASX:CCR) |
A$0.24 |
A$0.40 |
40.4% |
|
Collins Foods (ASX:CKF) |
A$9.38 |
A$16.09 |
41.7% |
|
Austal (ASX:ASB) |
A$6.81 |
A$13.24 |
48.6% |
|
Advanced Braking Technology (ASX:ABV) |
A$0.10 |
A$0.16 |
38.5% |
Let’s dive into some prime choices out of the screener.
Overview: Elders Limited is an Australian company that offers agricultural products and services to rural and regional customers, with a market capitalization of A$1.45 billion.
Operations: Elders generates revenue through its Branch Network (A$2.70 billion), Wholesale Products (A$362.96 million), and Feed and Processing Services (A$142.30 million).
Estimated Discount To Fair Value: 46.1%
Elders Limited’s recent earnings report shows a strong performance with net income rising to A$33.62 million, up from A$11.59 million the previous year. The stock is currently trading at A$7.57, significantly below its estimated fair value of A$14.04, indicating it may be undervalued based on cash flows. Despite past shareholder dilution and a modest forecasted return on equity of 10.8%, Elders’ revenue and earnings growth projections outpace the broader Australian market expectations.
Overview: Energy One Limited offers software products, outsourced operations, and advisory services to wholesale energy, environmental, and carbon trading markets in Australasia and Europe, with a market cap of A$441.76 million.
Operations: The company’s revenue primarily comes from the Energy Software Industry segment, amounting to A$61.12 million.
Estimated Discount To Fair Value: 17.5%
Energy One Limited’s recent earnings report highlights robust financial performance, with net income rising to A$5.89 million from A$1.44 million the previous year. The stock trades at A$14.10, 17.5% below its estimated fair value of A$17.09, suggesting it is undervalued based on cash flows despite not being significantly below fair value criteria. Earnings are forecasted to grow significantly faster than the market, although revenue growth is expected to be more moderate at 14.6% annually.
Overview: NRW Holdings Limited, with a market cap of A$1.74 billion, offers diversified contract services to the resources and infrastructure sectors in Australia through its subsidiaries.
Operations: The company’s revenue is derived from its key segments, with MET generating A$932.02 million, Civil contributing A$823.72 million, and Mining accounting for A$1.54 billion.
Estimated Discount To Fair Value: 31.3%
NRW Holdings is trading at A$3.81, significantly below its estimated fair value of A$5.55, indicating undervaluation based on cash flows. Despite a decline in net income to A$27.67 million from A$105.1 million last year, earnings are projected to grow at 24.6% annually, outpacing the market average of 10.7%. However, profit margins have decreased and the dividend yield of 4.33% is not well covered by earnings, which may affect sustainability.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include ASX:ELD ASX:EOL and ASX:NWH.
This article was originally published by Simply Wall St.
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