3 TSX Stocks Estimated To Be Trading At Discounts Up To 46.4%
The Canadian market is currently experiencing a robust economic recovery, with employment growth outpacing expectations and inflation pressures remaining contained. This environment presents opportunities for investors to explore undervalued stocks on the TSX that may be trading at significant discounts. Identifying such stocks involves assessing their fundamentals and potential for growth within the context of Canada's strengthening economy and stable monetary policy landscape.
Top 10 Undervalued Stocks Based On Cash Flows In Canada
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| Topicus.com (TSXV:TOI) | CA$104.52 | CA$174.61 | 40.1% |
| NFI Group (TSX:NFI) | CA$24.60 | CA$44.08 | 44.2% |
| Mattr (TSX:MATR) | CA$17.84 | CA$32.07 | 44.4% |
| Martinrea International (TSX:MRE) | CA$10.86 | CA$20.68 | 47.5% |
| Lumine Group (TSXV:LMN) | CA$25.18 | CA$49.93 | 49.6% |
| Hemlo Mining (TSX:HMMC) | CA$7.04 | CA$13.14 | 46.4% |
| Groupe Dynamite (TSX:GRGD) | CA$65.74 | CA$116.51 | 43.6% |
| Gildan Activewear (TSX:GIL) | CA$79.44 | CA$147.91 | 46.3% |
| Constellation Software (TSX:CSU) | CA$3162.97 | CA$5955.96 | 46.9% |
| Aritzia (TSX:ATZ) | CA$138.63 | CA$248.90 | 44.3% |
Below we spotlight a couple of our favorites from our exclusive screener.
Dream Industrial Real Estate Investment Trust (TSX:DIR.UN)
Overview: Dream Industrial Real Estate Investment Trust is an owner, manager, and operator of a global portfolio of diversified industrial properties with a market cap of approximately CA$4.02 billion.
Operations: The company generates revenue primarily from its investment properties, amounting to CA$554.40 million.
Estimated Discount To Fair Value: 18.3%
Dream Industrial Real Estate Investment Trust reported Q2 2026 earnings with sales of C$131.42 million, up from C$124.58 million year-over-year, though net income declined to C$29.7 million from C$46.61 million. Trading at approximately 18% below its estimated fair value, the stock is considered undervalued based on discounted cash flow analysis (C$13.99 vs future cash flow value of C$17.13). Earnings are forecasted to grow significantly at 23% annually over the next three years, outpacing market averages.
- Our growth report here indicates Dream Industrial Real Estate Investment Trust may be poised for an improving outlook.
- Navigate through the intricacies of Dream Industrial Real Estate Investment Trust with our comprehensive financial health report here.
Hemlo Mining (TSX:HMMC)
Overview: Hemlo Mining Corp. focuses on the production and operation of gold mining assets in Canada, with a market cap of CA$2.09 billion.
Operations: The company generates its revenue primarily from gold mining operations within Canada.
Estimated Discount To Fair Value: 46.4%
Hemlo Mining Corp. is trading at CA$7.04, significantly below its estimated future cash flow value of CA$13.14, suggesting it may be undervalued based on cash flows. The company became profitable this year and reported Q2 2026 net income of US$31 million, a substantial turnaround from the previous year's loss. Earnings are expected to grow significantly at 22.5% annually over the next three years, surpassing Canadian market averages.
- Upon reviewing our latest growth report, Hemlo Mining's projected financial performance appears quite optimistic.
- Take a closer look at Hemlo Mining's balance sheet health here in our report.
Mattr (TSX:MATR)
Overview: Mattr Corp. is a materials technology company that provides solutions for infrastructure markets such as electrification, transportation, mining, energy, communication and water management across various regions including Canada, the United States and several international markets, with a market cap of CA$1.10 billion.
Operations: Mattr Corp.'s revenue segments focus on delivering materials technology solutions to infrastructure sectors like electrification, transportation, mining, energy, communication and water management across Canada and international regions including the United States, Europe, the Middle East, Africa and the Asia Pacific.
Estimated Discount To Fair Value: 44.4%
Mattr Corp. is trading at CA$17.84, considerably below its estimated future cash flow value of CA$32.07, indicating potential undervaluation based on cash flows. Recent earnings results show a turnaround with Q2 2026 net income of CAD 19.82 million compared to a loss last year, despite lower profit margins this year. Earnings are forecasted to grow significantly at 28.21% annually over the next three years, outpacing Canadian market averages but with low return on equity expectations and insufficient interest coverage from earnings.
- In light of our recent growth report, it seems possible that Mattr's financial performance will exceed current levels.
- Unlock comprehensive insights into our analysis of Mattr stock in this financial health report.
Make It Happen
- Explore the 28 names from our Undervalued TSX Stocks Based On Cash Flows screener here.
- Got skin in the game with these stocks? Elevate how you manage them by using Simply Wall St's portfolio, where intuitive tools await to help optimize your investment outcomes.
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Seeking Other Investments?
- 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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