In December 2024, global markets have been marked by mixed performances, with major U.S. indexes like the S&P 500 and Nasdaq Composite reaching record highs while others like the Russell 2000 experienced declines. Amidst this backdrop of divergent sector performances and geopolitical developments, investors may find opportunities in stocks that appear undervalued by the market. Identifying such stocks often involves looking beyond current market trends to assess a company's intrinsic value relative to its price, considering factors such as financial health, growth potential, and industry position.

Top 10 Undervalued Stocks Based On Cash Flows

Click here to see the full list of 910 stocks from our Undervalued Stocks Based On Cash Flows screener.

We're going to check out a few of the best picks from our screener tool.

Vista Group International

Overview: Vista Group International Limited offers software and data analytics solutions to the global film industry, with a market capitalization of NZ$736.80 million.

Operations: Vista Group International Limited generates its revenue by providing software and data analytics solutions tailored for the film industry on a global scale.

Estimated Discount To Fair Value: 18.5%

Vista Group International is trading at NZ$3.1, approximately 18.5% below its estimated fair value of NZ$3.8, indicating potential undervaluation based on discounted cash flow analysis. Despite recent investor activism, with resolutions withdrawn and a special meeting canceled, the company is projected to achieve revenue growth of 12.3% annually and become profitable within three years—an above-average market growth rate—though its return on equity remains forecasted to be low at 10.8%.

• Upon reviewing our latest growth report, Vista Group International's projected financial performance appears quite optimistic.
• Dive into the specifics of Vista Group International here with our thorough financial health report.

Lindab International

Overview: Lindab International AB (publ) manufactures and sells ventilation system products and solutions in Europe, with a market cap of SEK18.37 billion.

Operations: The company's revenue is derived from its Ventilation Systems segment, which accounts for SEK10.10 billion, and its Profile Systems segment, contributing SEK3.23 billion.

Estimated Discount To Fair Value: 47%

Lindab International is trading at SEK238.4, significantly below its estimated fair value of SEK450.07, highlighting potential undervaluation based on discounted cash flow analysis. Earnings are expected to grow significantly at 28.5% annually, outpacing the Swedish market's growth rate of 15.3%. However, recent earnings reports show a decline in net income and EPS compared to the previous year. The company is actively seeking acquisitions while restructuring its Profile Systems segment for improved profitability.

• Our earnings growth report unveils the potential for significant increases in Lindab International's future results.
• Click here and access our complete balance sheet health report to understand the dynamics of Lindab International.

Befesa

Overview: Befesa S.A. provides environmental recycling services to the steel and aluminum industries across European, Asian, and North American markets, with a market cap of €902.40 million.

Operations: The company's revenue is primarily derived from its Steel Dust segment at €783.78 million, followed by Secondary Aluminium at €365.33 million, and Salt Slags at €105.32 million.

Estimated Discount To Fair Value: 49.4%

Befesa is trading at €22.56, significantly below its fair value estimate of €44.59, suggesting undervaluation based on discounted cash flow analysis. Despite a decline in recent earnings and net income compared to last year, earnings are forecasted to grow significantly at 29.61% annually, outpacing the German market's growth rate of 20.7%. However, interest payments are not well covered by earnings and the dividend track record remains unstable.

• Our expertly prepared growth report on Befesa implies its future financial outlook may be stronger than recent results.
• Click to explore a detailed breakdown of our findings in Befesa's balance sheet health report.

Where To Now?

• Gain an insight into the universe of 910 Undervalued Stocks Based On Cash Flows by clicking here.
• Are any of these part of your asset mix? Tap into the analytical power of Simply Wall St's portfolio to get a 360-degree view on how they're shaping up.
• Discover a world of investment opportunities with Simply Wall St's free app and access unparalleled stock analysis across all markets.

Want To Explore Some Alternatives?

• Explore high-performing small cap companies that haven't yet garnered significant analyst attention.
• Diversify your portfolio with solid dividend payers offering reliable income streams to weather potential market turbulence.
• Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management.

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 NZSE:VGL OM:LIAB and XTRA:BFSA.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com