There are some stocks, which though being fundamentally strong fall out of favor at different times. Such stocks bear the maximum brunt of market corrections and are heavily sold into.
With investors reacting negatively, a few of such stocks become undervalued and position these as best Oversold Stocks to Buy for long-term growth.
Pilbara Minerals Limited (ASX: PLS)
Pilbara Minerals Limited achieved a robust operational performance, producing a record volume of 226.2 thousand dry metric tonnes (dmt) of spodumene concentrate during the three-month period ending on 30 June 2024.
Compared to the previous quarter in March 2024, prices rose by 4% to an average estimated realized price of US$840/dmt (CIF China) on an SC5.3 basis, with sales increasing by 43% to 235.8k dmt. Revenue climbed by 58% to $305M from the prior quarter. This was led by a 43% rise in sales volume and a 4% increase in the average realized price.
Pilbara Minerals Limited is currently one of the Most Undervalued Stocks as it maintains promising long-term production growth plans, with the P1000 project expected to be completed by FY25. This project is anticipated to deliver a robust 1Mtpa nameplate capacity, marking substantial improvements from the current production rates. Furthermore, the P2000 plans aim to double this capacity, reinforcing the company's commitment to significant production growth.
The company's financial position remained strong, with a cash balance of $1.6B at the end of the June Quarter.
Flight Centre Travel Group Limited (ASX: FLT)
Despite challenges in the broader market, Flight Centre Travel Group Limited (ASX: FLT) demonstrated impressive resilience and adaptability in its half-year results for the period ending 31 December 2023. The company reported a 15% surge in Total Transaction Value (TTV) to $11.3 billion, marking its second-best start to a year. The company lately revised its guidance for FY24. It now expects to achieve TTV of $23.7billion, which is in line with the record FY19 result and a circa $1.7billion year-on-year increase.
This growth was propelled by strong performance in both corporate and leisure segments, with corporate business reaching a record $5.9 billion and leisure TTV surpassing $5 billion. Revenue growth outpaced TTV, rising by 28%, while there was a notable improvement in revenue margin to 11.4%, signaling enhanced profitability.
Flight Centre Travel Group has showcased strong financial management through prudent debt reduction and strategic decision-making. By repaying a substantial amount of bank debt and trimming overdraft facilities, FLT has bolstered its financial resilience and minimized interest costs.
FLT though presently one of the Most Oversold Stocks is positioned to capitalize on industry trends, such as a surge in airline capacity and decreased airfares, with projections indicating a record year for travel. Australian outbound capacity is expected to nearly reach pre-COVID levels, and global travel demand is projected to increase significantly. This favorable environment presents FLT with opportunities to capture a larger market share and drive revenue growth.
Liontown Resources Limited (ASX: LTR)
Liontown Resources Limited (ASX: LTR) made an announcement on 31 July 2024, stating that the initial spodumene concentrate had been successfully produced at Kathleen Valley. This achievement follows the completion of the wet plant commissioning and the seamless operation of the Kathleen Valley value chain. The process plant has been progressively commissioned, allowing for the processing of ore through the entire crushing, milling, and flotation circuit, resulting in the production of the first concentrate.
A total of 1,596 development meters were recorded during the quarter, bringing the cumulative total to approximately 3,500 meters since the commencement of underground mining in November 2023. The progress in meters advanced and ground conditions has been in line with expectations and within budget.
The open pit mining at Kathleen’s Corner also saw progress, with 1.3 million bulk cubic meters (BCM) mined, contributing to the stockpiling of 216,000 tonnes of clean ore in preparation for initial production. The mining activities are on track to access the primary ore zone in the September 2024 quarter, aligning with the production schedule.
As of 30 June 2024, the Company's cash balance stood at $122.9 million.
The Kathleen Valley Lithium Project, the company's flagship endeavour, exhibits strong commercial potential with its combination of high-grade resources and significant scale, boasting a mineral resource base of 5.4Mt of Lithium Carbonate Equivalent (LCE). Additionally, the project's first five years of production have already been secured through offtake agreements, ensuring a stable revenue stream moving forward.
Source: Company's Report
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