In This Article:
The United Kingdom market has experienced a flat performance over the last week, yet it has achieved a 7.5% rise over the past year, with earnings anticipated to grow by 14% annually in the coming years. In this context, identifying stocks that are potentially trading below their estimated value can be an attractive opportunity for investors seeking to capitalize on future growth prospects while navigating current market conditions.
Top 10 Undervalued Stocks Based On Cash Flows In The United Kingdom
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| GlobalData (AIM:DATA) | £1.985 | £3.72 | 46.6% |
| S&U (LSE:SUS) | £18.45 | £36.65 | 49.7% |
| Marks Electrical Group (AIM:MRK) | £0.62 | £1.22 | 49.3% |
| Informa (LSE:INF) | £8.248 | £16.14 | 48.9% |
| Redcentric (AIM:RCN) | £1.2375 | £2.41 | 48.6% |
| Mpac Group (AIM:MPAC) | £4.525 | £8.99 | 49.7% |
| BATM Advanced Communications (LSE:BVC) | £0.19075 | £0.37 | 48.3% |
| Foxtons Group (LSE:FOXT) | £0.646 | £1.20 | 46.4% |
| SysGroup (AIM:SYS) | £0.325 | £0.65 | 50% |
| Genel Energy (LSE:GENL) | £0.775 | £1.50 | 48.4% |
We'll examine a selection from our screener results.
ConvaTec Group
Overview: ConvaTec Group PLC develops, manufactures, and sells medical products, services, and technologies across Europe, North America, and internationally with a market cap of £4.64 billion.
Operations: The company's revenue segment focuses on the development, manufacture, and sale of medical products and technologies, generating $2.20 billion.
Estimated Discount To Fair Value: 41.7%
ConvaTec Group appears undervalued based on cash flows, trading at £2.27 while estimated fair value stands at £3.89, suggesting a significant discount. Analysts forecast earnings growth of 21% annually, outpacing the UK market's 14%. Despite high debt levels and modest revenue growth projections of 5.8%, recent results show improved profitability with net income rising to US$78.6 million for H1 2024 from US$55.7 million last year, supporting its undervaluation thesis.
Sage Group
Overview: The Sage Group plc, along with its subsidiaries, offers technology solutions and services for small and medium businesses across the United States, the United Kingdom, France, and internationally, with a market cap of £10.22 billion.
Operations: Revenue segments are distributed as follows: Europe generates £595 million, North America contributes £1.01 billion, and the United Kingdom & Ireland accounts for £488 million.