Street Calls of the Week
In January 2024, InvestingPro’s Fair Value models identified a significant mispricing in TransAlta Corporation (NYSE:TAC), highlighting an opportunity that would ultimately deliver a 63.54% return for investors. This success story demonstrates the power of comprehensive valuation analysis in identifying market inefficiencies. For investors seeking similar opportunities, the latest most undervalued list continues to reveal potential market mispricings.
TransAlta Corporation, a major North American utility company, operates electricity generation and cogeneration facilities across Canada, the United States, and Australia. When InvestingPro’s Fair Value models flagged the stock at $7.74, the company was demonstrating strong fundamental performance with annual revenue of $2.53 billion and EBITDA of $1.29 billion. The models indicated a potential upside of 48.67%, suggesting significant undervaluation despite the company’s solid operational metrics.
The subsequent performance validated InvestingPro’s analysis. TAC’s stock price steadily climbed, supported by multiple positive catalysts including strong quarterly earnings beats, successful operational execution, and strategic initiatives. The company activated a 300MW wind project in Oklahoma and implemented an automatic share buyback plan, demonstrating continued operational momentum.
By September 2025, TransAlta’s stock reached $12.65, achieving the Fair Value target price and delivering a total return of 63.54% over 20 months. This outcome showcased the accuracy of InvestingPro’s valuation methodology, which combines multiple analytical approaches including intrinsic value calculation, margin of safety consideration, and future cash flow analysis.
Recent developments continue to support the original thesis. The company has maintained strong operational performance through multiple quarters, received positive analyst coverage, and successfully executed its growth initiatives. Notable developments include the appointment of a new CFO and consistent earnings beats, reflecting robust business execution.
InvestingPro’s Fair Value analysis success with TransAlta exemplifies the platform’s ability to identify meaningful investment opportunities through comprehensive fundamental analysis. The methodology combines multiple valuation approaches, including discounted cash flow models, comparable company analyses, and market range analysis, to provide investors with actionable insights.
For investors looking to uncover similar opportunities, InvestingPro offers access to real-time Fair Value analysis across thousands of stocks, along with financial health scores, earnings quality metrics, and proprietary valuation models. With tools like these, investors can identify undervalued opportunities before the market recognizes their full potential.