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As the Australian stock market experiences a modest upswing amid geopolitical developments and commodity fluctuations, investors are keenly observing opportunities that may arise from undervalued stocks. In this context, identifying stocks trading below their intrinsic value can be particularly appealing, as they present potential for growth when market conditions stabilize.

Click here to see the full list of 32 stocks from our Undervalued ASX Stocks Based On Cash Flows screener.

Here we highlight a subset of our preferred stocks from the screener.

Overview: Eagers Automotive Limited owns and operates motor vehicle dealerships in Australia and New Zealand, with a market cap of A$7.97 billion.

Operations: The company generates revenue primarily from car retailing, amounting to A$12.23 billion, with an additional contribution of A$54.69 million from property.

Estimated Discount To Fair Value: 14.0%

Eagers Automotive is trading at A$30.57, below its fair value estimate of A$35.54, indicating potential undervaluation based on cash flows. Despite a recent strategic partnership with Mitsubishi and a follow-on equity offering raising A$501 million, interest payments are not well covered by earnings. However, earnings are forecast to grow significantly at 21.6% annually over the next three years, surpassing the Australian market’s growth rate of 14.3%.

Overview: NRW Holdings Limited offers diversified contract services to the resources and infrastructure sectors in Australia, with a market cap of A$2.21 billion.

Operations: The company’s revenue is derived from three main segments: Mining at A$1.54 billion, MET at A$932.02 million, and Civil at A$823.72 million.

Estimated Discount To Fair Value: 47.3%

NRW Holdings is trading at A$4.81, significantly below its estimated fair value of A$9.13, suggesting undervaluation based on cash flows. Despite a decline in net income to A$27.67 million for FY2025 and insider selling, earnings are projected to grow substantially at 30.6% annually over the next three years, outpacing the Australian market’s growth rate of 14.3%. However, the dividend yield of 3.43% is not adequately covered by earnings.

Overview: Vault Minerals Limited is involved in the exploration, mine development, operations and sale of gold and gold/copper concentrate in Australia and Canada, with a market cap of A$4.85 billion.

Operations: The company’s revenue segments consist of Deflector (A$477.79 million), Sugar Zone (A$0.23 million), Mount Monger (A$287.58 million) and Leonora Operation (A$666.50 million).

Estimated Discount To Fair Value: 38.6%

Vault Minerals, currently priced at A$0.72, is trading well below its estimated fair value of A$1.17, highlighting potential undervaluation based on cash flows. The company has shown a turnaround with net income reaching A$236.98 million from a loss last year and sales jumping to A$1.43 billion from A$620 million. Earnings are forecast to grow significantly at 21% annually over the next three years, supported by a share repurchase program targeting up to 10% of issued capital.

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:APE ASX:NWH and ASX:VAU.

This article was originally published by Simply Wall St.

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Story Continues

Peet, a notable player in the Australian property scene, has shown resilience with its debt to equity ratio improving from 57.1% to 53.5% over five years. Despite a high net debt to equity ratio of 45.8%, its interest payments are well covered by EBIT at 10.7 times, reflecting robust financial health. The company reported earnings growth of 60% last year, outpacing the real estate industry average of 40.9%. With sales jumping from A$292 million to A$415 million and net income rising from A$36 million to A$58 million, Peet’s strategic review led by Goldman Sachs aims to leverage these strong market conditions further.

Simply Wall St Value Rating: ★★★★★☆

Overview: Wagners Holding Company Limited is involved in the production and sale of construction and building materials across several countries, including Australia, the United States, New Zealand, the United Kingdom, Papua New Guinea, and Malaysia, with a market capitalization of approximately A$565.22 million.

Operations: Wagners Holding generates revenue primarily from Construction Materials (A$257.69 million), Project Services (A$105.71 million), and Composite Fibre Technology (A$68.45 million). The company also earns a small amount from Earth Friendly Concrete, contributing A$0.16 million to its revenue streams.

Wagners Holding, a nimble player in Australia’s construction materials sector, has seen its earnings surge by 120.9% over the past year, outpacing industry growth. The company recently expanded its concrete and quarry operations to capitalize on infrastructure demand in Southeast Queensland. Despite sales dipping to A$431 million from A$481 million last year, net income climbed to A$22.72 million from A$10.28 million, highlighting improved operational efficiency with high-quality earnings and satisfactory debt management at a 12.6% net debt-to-equity ratio. Wagners’ inclusion in the S&P/ASX Emerging Companies Index underscores its growing market presence amidst strategic expansions and sustainability-focused ventures like Composite Fiber Technologies (CFT).

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:DUI ASX:PPC and ASX:WGN.

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