3 TSX Stocks Estimated To Be Trading At Discounts Of Up To 49.8%
The Canadian market has been navigating a complex landscape, with rising long-term bond yields impacting investor sentiment and causing fluctuations in stock prices. As the bond market takes center stage, investors are keenly assessing opportunities that arise from these conditions. In this context, identifying undervalued stocks becomes crucial as they may offer potential value amid the current economic environment.
Top 10 Undervalued Stocks Based On Cash Flows In Canada
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| SECURE Waste Infrastructure (TSX:SES) | CA$23.98 | CA$47.93 | 50% |
| Santacruz Silver Mining (TSXV:SCZ) | CA$13.90 | CA$27.68 | 49.8% |
| Pan American Silver (TSX:PAAS) | CA$76.11 | CA$139.74 | 45.5% |
| NFI Group (TSX:NFI) | CA$22.58 | CA$42.99 | 47.5% |
| Martinrea International (TSX:MRE) | CA$10.19 | CA$20.37 | 50% |
| Groupe Dynamite (TSX:GRGD) | CA$63.00 | CA$115.14 | 45.3% |
| Gildan Activewear (TSX:GIL) | CA$73.83 | CA$146.75 | 49.7% |
| Eldorado Gold (TSX:ELD) | CA$66.54 | CA$130.90 | 49.2% |
| Constellation Software (TSX:CSU) | CA$3125.27 | CA$5924.43 | 47.2% |
| Aritzia (TSX:ATZ) | CA$131.19 | CA$246.55 | 46.8% |
Let's explore several standout options from the results in the screener.
Constellation Software (TSX:CSU)
Overview: Constellation Software Inc. acquires, builds, and manages vertical market software businesses to provide mission-critical software solutions for both public and private sectors, with a market cap of CA$65.06 billion.
Operations: The company's revenue segment is primarily derived from Software & Programming, totaling $12.64 billion.
Estimated Discount To Fair Value: 47.2%
Constellation Software is trading at CA$3125.27, significantly below its estimated future cash flow value of CA$5924.43, suggesting it may be undervalued based on cash flows. Recent earnings showed strong growth, with Q2 revenue reaching US$3.34 billion and net income at US$274 million, a substantial increase from the previous year. Despite high debt levels, its earnings are forecast to grow faster than the Canadian market average over the next few years.
- Insights from our recent growth report point to a promising forecast for Constellation Software's business outlook.
- Click here and access our complete balance sheet health report to understand the dynamics of Constellation Software.
Gildan Activewear (TSX:GIL)
Overview: Gildan Activewear Inc. manufactures and sells various apparel products, with a market cap of CA$13.77 billion.
Operations: The company's revenue is primarily derived from its apparel segment, which generated $4.74 billion.
Estimated Discount To Fair Value: 49.7%
Gildan Activewear, trading at CA$73.83, is priced significantly below its estimated future cash flow value of CA$146.75, indicating potential undervaluation based on cash flows. Despite a recent net loss of US$49.95 million in Q2 2026 and lowered revenue guidance for the year, earnings are projected to grow faster than the Canadian market average over the next few years. However, profit margins have declined from last year, and shareholders faced dilution recently.
- In light of our recent growth report, it seems possible that Gildan Activewear's financial performance will exceed current levels.
- Delve into the full analysis health report here for a deeper understanding of Gildan Activewear.
Santacruz Silver Mining (TSXV:SCZ)
Overview: Santacruz Silver Mining Ltd. is involved in the acquisition, exploration, development, production, and operation of mineral properties in Latin America with a market cap of CA$1.23 billion.
Operations: The company's revenue is derived from its mineral properties in Latin America, with contributions of $40.65 million from Porco, $73.18 million from Bolivar, $133.40 million from Zimapan, $148.44 million from SAN Lucas, and $93.98 million from the Caballo Blanco Group.
Estimated Discount To Fair Value: 49.8%
Santacruz Silver Mining, trading at CA$13.9, is significantly below its estimated future cash flow value of CA$27.68, highlighting potential undervaluation based on cash flows. Despite a decrease in net income to US$2.01 million for Q2 2026 from US$20.98 million the previous year and reduced profit margins, earnings are expected to grow substantially over the next three years. However, significant insider selling has occurred recently, warranting caution for potential investors.
- Our expertly prepared growth report on Santacruz Silver Mining implies its future financial outlook may be stronger than recent results.
- Navigate through the intricacies of Santacruz Silver Mining with our comprehensive financial health report here.
Summing It All Up
- Click this link to deep-dive into the 32 companies within our Undervalued TSX Stocks Based On Cash Flows screener.
- Have you diversified into these companies? Leverage the power of Simply Wall St's portfolio to keep a close eye on market movements affecting your investments.
- Invest smarter with the free Simply Wall St app providing detailed insights into every stock market around the globe.
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.
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