Over the last 7 days, the Australian market has remained flat, yet over the past 12 months, it has risen by 20%, with earnings forecasted to grow by 12% annually. In this context of steady growth, identifying undervalued stocks like Data#3 and others can offer potential opportunities for investors seeking to capitalize on companies trading below their intrinsic value.

Top 10 Undervalued Stocks Based On Cash Flows In Australia

Click here to see the full list of 43 stocks from our Undervalued ASX Stocks Based On Cash Flows screener.

Let's uncover some gems from our specialized screener.

Data#3

Overview: Data#3 Limited provides information technology solutions and services across Australia, Fiji, and the Pacific Islands, with a market capitalization of A$1.16 billion.

Operations: The company's revenue primarily comes from its role as a value-added IT reseller and IT solutions provider, generating A$805.75 million.

Estimated Discount To Fair Value: 44.4%

Data#3 is trading at A$7.47, significantly below its estimated fair value of A$13.44, suggesting it may be undervalued based on cash flows. Despite a dividend yield of 3.45% not being well covered by earnings or free cash flows, the company has shown strong revenue growth forecasts of 33.2% annually, outpacing the Australian market average. Recent changes include appointing PwC as auditor and board adjustments with Ms. Leanne Muller retiring as Non-Executive Director.

• Our comprehensive growth report raises the possibility that Data#3 is poised for substantial financial growth.
• Click here and access our complete balance sheet health report to understand the dynamics of Data#3.

Medibank Private

Overview: Medibank Private Limited offers private health insurance and health services in Australia, with a market capitalization of A$10.13 billion.

Operations: The company generates revenue through its Health Insurance segment, contributing A$7.90 billion, and Medibank Health services, which add A$360.10 million.

Estimated Discount To Fair Value: 42.8%

Medibank Private is trading at A$3.68, well below its estimated fair value of A$6.43, which highlights potential undervaluation based on cash flows. Although the dividend yield of 4.51% is not adequately covered by earnings, the company's earnings are forecast to grow significantly at 28% annually, surpassing the Australian market's average growth rate. Recent announcements include a fully franked dividend increase and reported net income of A$3.9 million for the fiscal year ending June 2024.

• Our earnings growth report unveils the potential for significant increases in Medibank Private's future results.
• Navigate through the intricacies of Medibank Private with our comprehensive financial health report here.

National Storage REIT

Overview: National Storage REIT is the largest self-storage provider in Australia and New Zealand, operating over 225 centers to serve more than 90,000 residential and commercial customers, with a market cap of A$3.51 billion.

Operations: The company's revenue segment primarily consists of A$354.69 million from the operation and management of its storage centers.

Estimated Discount To Fair Value: 35.5%

National Storage REIT, trading at A$2.54, is considered undervalued with an estimated fair value of A$3.94. Despite a decrease in net income to A$28.93 million for the fiscal year ending June 2024, earnings are expected to grow significantly at 20% annually, outpacing the Australian market average. The company maintains a reliable dividend yield of 4.33%. Recent announcements include an estimated final distribution of 5.5 cents per stapled security with a tax-deferred component.

• The analysis detailed in our National Storage REIT growth report hints at robust future financial performance.
• Unlock comprehensive insights into our analysis of National Storage REIT stock in this financial health report.

Key Takeaways

• Unlock our comprehensive list of 43 Undervalued ASX Stocks Based On Cash Flows by clicking here.
• Are you invested in these stocks already? Keep abreast of every twist and turn by setting up a portfolio with Simply Wall St, where we make it simple for investors like you to stay informed and proactive.
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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 ASX:DTL ASX:MPL and ASX:NSR.

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