Three Stocks That Could Be Undervalued by Up to 48.6% by Investors

February 11, 2025 07:30 PM AEDT | By Team Kalkine Media

Three Stocks That Could Be Undervalued by Up to 48.6% by Investors — Image source: Shutterstock

WuXi XDC Cayman (SEHK:2268)

WuXi XDC Cayman Inc. serves as an investment holding company operating in contract research, development, and manufacturing across key markets including China, North America, and Europe. With a valued presence in the industry, it holds a market cap of HK$36.43 billion.

Revenue from its Pharmaceuticals segment reaches CN¥2.80 billion.

Currently trading at HK$30.4, WuXi XDC Cayman stands well below its estimated fair value of HK$55.95 based on discounted cash flow analysis, implying undervaluation. The company's earnings outlook boasts an impressive 26.9% annual growth, eclipsing the Hong Kong market's average of 11.5%. Projected revenue and profit surges for 2024 further underscore its appeal despite a low forecasted return on equity. Anticipated growth trends suggest promising future performance.

Tourmaline Oil (TSX:TOU)

Tourmaline Oil Corp. engages in the exploration and development of oil and natural gas within the Western Canadian Sedimentary Basin, boasting a market cap of CA$25.15 billion.

It generates CA$4.48 billion in revenue from its oil and natural gas properties.

Trading at CA$69.25, Tourmaline Oil is perceived as highly undervalued with a fair value estimate of CA$134.84 following discounted cash flow analysis. The outlook for earnings growth is robust at 30.58% annually, outshining the overall Canadian market's growth prediction of 17.8%. Although the dividend yield of 5.63% raises coverage concerns due to limited free cash flows, the company's growth potential is compelling.

adidas (XTRA:ADS)

adidas AG, along with its subsidiaries, engages in the design and marketing of athletic and sports lifestyle products across multiple geographic regions. Its market cap is estimated at approximately €45.94 billion.

The company draws significant portions of revenue from areas such as Greater China (€3.34 billion), Latin America (€2.44 billion), and North America (€4.95 billion).

Currently, at €257.3, adidas is considered undervalued, with the fair value pegged at €394.67 based on discounted cash flow analysis. Its recent return to profitability suggests an optimistic trajectory with anticipated earnings growth of 32.3% annually, surpassing the German market's growth rate of 19.3%.

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