3 TSX Stocks Trading Up to 47.5% Below Intrinsic Value: A Deep Dive into Undervalued Opportunities in 2025

If you're a value investor, the Canadian market in 2025 is serving up some golden opportunities. Three TSX-listed stocks-EQB Inc. (EQB), Black Diamond Group (BDI), and Lithium Royalty Corp. (LIRC)-are trading at discounts of up to 49.4% relative to their estimated intrinsic values, according to cash flow-based valuation models. These companies span sectors from banking to resource royalties, offering a mix of high-growth potential and defensive qualities. Let's break down why these stocks could be setup for a rebound.

1. EQB Inc. (EQB): A Bank with a 48.9% Discount to Value

EQB Inc. is a prime example of a stock trading at a jaw-dropping discount to its intrinsic worth. At CA$96.71, it's priced 48.9% below its estimated fair value of CA$189.15. This gap is staggering, especially for a company projected to grow earnings by 25.1% annually. While EQB reported a recent net loss, its 2.36% dividend yield and strong balance sheet make it a compelling candidate for patient investors. The key here is to monitor its ability to stabilize profitability while leveraging its low valuation as a margin of safety.

2. Black Diamond Group (BDI): A 49.4% Undervaluation in a High-Growth Sector

Black Diamond Group is arguably the most compelling name on this list. Trading at CA$14.40 versus an estimated fair value of CA$28.44, it's priced 49.4% below intrinsic value. This diversified financial services firm is forecasted to grow earnings by 21% annually, driven by strong performance in its lending and insurance segments. Recent quarterly results show robust revenue growth and disciplined cost management, suggesting the company is well-positioned to capitalize on its undervaluation. For aggressive investors, BDI's discount offers a rare chance to buy into a high-quality business at half-price.

3. Lithium Royalty Corp. (LIRC): A Strategic Play on the EV Boom

Lithium Royalty Corp. is trading at CA$9.33, or 16.1% below its estimated fair value of CA$11.12. While the discount isn't as extreme as EQB or BDI, LIRC's growth trajectory is electrifying. The company is projected to see revenue surge by 91.1% annually, fueled by its strategic acquisition of Altius Minerals' lithium assets. As the global shift to electric vehicles accelerates, LIRC's royalty model positions it to benefit from rising lithium prices without the operational risks of mining. Its recent innovations in supply chain management further bolster its long-term appeal.

The Bigger Picture: Why These Stocks Matter

These three stocks exemplify the power of cash flow-based valuation. EQB and BDI offer immediate income and earnings growth in the banking and financial services sectors, while LIRC taps into the high-margin, high-demand world of critical minerals. All three trade at discounts that suggest the market isn't fully pricing in their future potential.

That said, no investment is without risk. EQB's recent net loss and BDI's exposure to interest rate fluctuations warrant caution. Meanwhile, LIRC's performance hinges on the volatile lithium market. But for investors with a long-term horizon and a stomach for volatility, these stocks represent compelling asymmetric setups.

Final Take

The TSX in 2025 is a treasure trove for value hunters. EQB, BDI, and LIRC offer a mix of deep discounts, strong fundamentals, and sector-specific tailwinds. As always, do your homework-dig into the cash flow statements, earnings guidance, and macroeconomic trends. But if the numbers align with the narratives here, these could be the kinds of stocks that turn a modest investment into a portfolio standout.