The Canadian stock market has experienced significant volatility recently, with notable swings and a modest overall change despite dramatic headlines. Amid this turbulence, identifying undervalued stocks can be crucial for investors seeking opportunities in a fluctuating market.

Top 10 Undervalued Stocks Based On Cash Flows In Canada

Click here to see the full list of 31 stocks from our Undervalued TSX Stocks Based On Cash Flows screener.

Let's dive into some prime choices out of the screener.

Cresco Labs

Overview: Cresco Labs Inc., along with its subsidiaries, cultivates, manufactures, and sells retail and medical cannabis products in the United States, with a market cap of CA$963.14 million.

Operations: Cresco Labs Inc. generates revenue through the cultivation, manufacturing, and sale of retail and medical cannabis products in the United States.

Estimated Discount To Fair Value: 38.9%

Cresco Labs is trading at CA$2.15, significantly below its estimated fair value of CA$3.52, indicating it may be undervalued based on cash flows. Despite recent insider selling and a net loss of US$54.33 million for Q2 2024, the company is expected to become profitable within three years with earnings forecasted to grow by 133.22% annually. Recent expansion into Ohio's adult-use market could bolster future revenue streams despite current sales declines.

• The growth report we've compiled suggests that Cresco Labs' future prospects could be on the up.

• Click here to discover the nuances of Cresco Labs with our detailed financial health report.

Canfor

Overview: Canfor Corporation is an integrated forest products company with operations in the United States, Asia, Canada, Europe, and internationally, and has a market cap of CA$1.72 billion.

Operations: Canfor generates revenue primarily from its Lumber segment, which accounts for CA$4.67 billion, and its Pulp & Paper segment, contributing CA$825 million.

Estimated Discount To Fair Value: 10.2%

Canfor Corporation (CA$14.51) is trading at 10.2% below its estimated fair value of CA$16.15, indicating it may be undervalued based on cash flows. Despite reporting a net loss of CA$191.1 million for Q2 2024, the company is expected to become profitable within three years with an annual profit growth forecast above market average and revenue growth outpacing the Canadian market slightly at 6.7% per year.

• According our earnings growth report, there's an indication that Canfor might be ready to expand.

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

Lithium Royalty

Overview: Lithium Royalty Corp. is a lithium-focused royalty company operating in Australia, Canada, South America, and the United States with a market cap of CA$382.77 million.

Operations: Lithium Royalty Corp. generates revenue through its lithium-focused royalty operations across Australia, Canada, South America, and the United States.

Estimated Discount To Fair Value: 23.6%

Lithium Royalty Corp. (CA$6.89) is trading 23.6% below its estimated fair value of CA$9.02, suggesting it may be undervalued based on discounted cash flows. The company’s revenue is forecast to grow at 46.7% per year, significantly outpacing the Canadian market average of 6.4%. Recent earnings reports show a positive turnaround with net income of US$0.266 million for Q2 2024 compared to a net loss in the previous year, indicating improving financial health and potential profitability within three years.

• Insights from our recent growth report point to a promising forecast for Lithium Royalty's business outlook.

• Unlock comprehensive insights into our analysis of Lithium Royalty stock in this financial health report.

Where To Now?

• Delve into our full catalog of 31 Undervalued TSX Stocks Based On Cash Flows 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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Ready To Venture Into Other Investment Styles?

• 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 CNSX:CL TSX:CFP and TSX:LIRC.

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