The Canadian market has shown resilience, rising 1.4% in the past week and climbing 28% over the last year, with earnings projected to grow by 16% annually. In such a robust environment, identifying stocks that are trading at significant discounts can present opportunities for investors seeking value amidst a thriving market.

Top 10 Undervalued Stocks Based On Cash Flows In Canada

Click here to see the full list of 27 stocks from our Undervalued TSX Stocks Based On Cash Flows screener.

Underneath we present a selection of stocks filtered out by our screen.

Computer Modelling Group

Overview: Computer Modelling Group Ltd. is a software and consulting technology company that develops and licenses reservoir simulation and seismic interpretation software, with a market cap of CA$984.21 million.

Operations: The company generates revenue of CA$90.29 million from its reservoir simulation and seismic interpretation software and related services.

Estimated Discount To Fair Value: 45.1%

Computer Modelling Group (CA$12.01) is trading 45.1% below its estimated fair value of CA$21.87, indicating potential undervaluation based on cash flows despite recent insider selling. While revenue growth is forecast at 11.5% annually, slower than the ideal 20%, earnings are expected to grow significantly at 24.6%, outpacing the Canadian market's average growth rate of 15.7%. Recent product launches like Focus CCS could enhance long-term prospects in carbon capture markets, supporting future cash flow potential.

• Our earnings growth report unveils the potential for significant increases in Computer Modelling Group's future results.

• Get an in-depth perspective on Computer Modelling Group's balance sheet by reading our health report here.

goeasy

Overview: goeasy Ltd. is a Canadian company offering non-prime leasing and lending services through its easyhome, easyfinancial, and LendCare brands, with a market cap of CA$3.17 billion.

Operations: The company's revenue is derived from its Easyhome segment, contributing CA$154.10 million, and its Easyfinancial segment, which accounts for CA$1.24 billion.

Estimated Discount To Fair Value: 47.3%

goeasy (CA$188.97) is trading significantly below its estimated fair value of CA$358.91, suggesting potential undervaluation based on cash flows. Despite a high level of debt not well-covered by operating cash flow and recent insider selling, the company forecasts robust revenue growth at 31.6% annually, surpassing market averages. Recent board changes with Radhika Kakkar's appointment may enhance strategic direction, while earnings are projected to grow steadily at 17.1% per year.

• The analysis detailed in our goeasy growth report hints at robust future financial performance.

• Navigate through the intricacies of goeasy with our comprehensive financial health report here.

NuVista Energy

Overview: NuVista Energy Ltd. operates in the exploration, development, and production of oil and natural gas reserves in the Western Canadian Sedimentary Basin with a market cap of CA$2.16 billion.

Operations: The company generates revenue of CA$1.23 billion from its oil and gas exploration and production activities in the Western Canadian Sedimentary Basin.

Estimated Discount To Fair Value: 33.9%

NuVista Energy (CA$10.53) trades well below its fair value estimate of CA$15.93, highlighting potential undervaluation based on cash flows. Earnings are expected to grow significantly at 45.1% annually, outpacing the Canadian market's growth rate of 15.7%. The company recently reported increased revenue and net income for Q2 2024, alongside a share buyback program completion worth CA$10.65 million, reinforcing its financial strength despite upcoming leadership changes with Mike Lawford as CEO in 2025.

• The growth report we've compiled suggests that NuVista Energy's future prospects could be on the up.

• Dive into the specifics of NuVista Energy here with our thorough financial health report.

Summing It All Up

• Click this link to deep-dive into the 27 companies within our Undervalued TSX Stocks Based On Cash Flows screener.

• 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.

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Interested In Other Possibilities?

• 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 TSX:CMG TSX:GSY and TSX:NVA.

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