Warren Buffett remains the most famous value investor of all the times. He always sought out companies that are undervalued in the market but having solid business plans. Such companies are normally the Best Companies to Invest in ASX and invariably have good upside potential and give excellent returns.
Smart investors looking for Best ASX Stocks prefer investing in undervalued stocks as these not only present better opportunities, it is also believed that such stocks face lower risk than their overvalued counterparts do. Buying stocks at a price lower than their intrinsic value largely offers a buffer against market volatility and bad investment decisions.
Top ASX Share with Upside Potential
Mineral Resources Limited (ASX: MIN)
Mineral Resources reported a 7% increase in revenue to $2,514.7 million for the half-year ended 31 December 2023 (1H24). Statutory net profit after tax surged to $518.0 million, up $127.9 million from the prior corresponding period. Operating cash flow before financing and tax reached $820.8 million, showing a robust conversion rate from underlying EBITDA at 122%.
Mineral Resources Limited has made significant progress in the Perth Basin, with the Lockyer-5 conventional gas development well yielding exceptional results, including 27m of net gas pay with an average porosity of 18%. Plans are underway for a well test in early April 2024.
MIN signed a Binding Heads of Agreement with Poseidon Nickel Limited (ASX: POS) to acquire the Lake Johnston nickel concentrator plant and tenure, intending to develop it into a lithium processing hub.
MIN reported a significant 111% increase in the underground Mineral Resource at its Mt Marion lithium mine to 19.3Mt at 1.22% Li2O as of January 31, 2024. This validates the Company’s decision to commence the underground exploration decline. the first blast having recently completed.
The company’s Revenue is anticipated to see a significant upswing, climbing from $4,821 million in FY24 to $6,382 million by FY26, accompanied by a rise in EBIT to $1,791 million and net income to $938 million by FY26. These projections bolster valuation metrics such as an EV/Revenue ratio of 2.78x, an EV/EBIT multiple of 9.9x, and a PE ratio of 14.03x by FY26. Moreover, with a projected return on assets (ROA) of 12.79%, return on invested capital (ROIC) at 16.95%, and return on equity (ROE) of 19.9% by FY26, the outlook offers attractive value propositions for investors.
GenusPlus Group Limited (ASX: GNP)
GenusPlus Group Limited’s total revenue reached $250 million, showcasing an 11% increase from the Previous Corresponding Period (PCP) and a notable 14% rise compared to the second half of 2023 (H2 2023)
The company's operational efficiency is evident in the Normalized EBITDA of $21.9 million, marking a remarkable 27% increase on the PCP and a solid 12% growth on H2 2023. With a Normalized EBITDA Margin of 8.7%, reflecting a 14.2% improvement from H2FY23, the company demonstrates effective cost management.
Net Profit After Tax - Adjusted (NPAT-A) stood at $10.2 million, exhibiting a robust 35% increase from the PCP and a commendable 24% growth compared to HY23.
The revised FY2024 guidance incorporates a better than forecast financial result for the March 2024 quarter. Genus now expects normalised FY2024 EBITDA growth compared to normalised EBITDA of $36.8 million in FY2023 to be in the range of 20% - 25%, exceeding the earlier guidance of 10-15%.
GenusPlus Group Limited has been awarded two contracts as part of Fortescue’s decarbonization plan in Western Australia having a combined value of approximately $50 million
It has also won a contract from ACCIONA Energia to design and build the Substation Works for the Aldoga Solar Farm in Queensland. Valued at $40 million, the project supports Queensland's renewable energy objectives, aiming for 50% renewable energy by 2030.
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