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The United Kingdom's stock market has recently faced challenges, with the FTSE 100 index experiencing declines due to weak trade data from China and broader global economic concerns. In this environment, investors may seek opportunities in undervalued stocks that could potentially offer value despite current market pressures.
Top 10 Undervalued Stocks Based On Cash Flows In The United Kingdom
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| Gooch & Housego (AIM:GHH) | £3.90 | £7.28 | 46.4% |
| Applied Nutrition (LSE:APN) | £1.08 | £2.00 | 45.9% |
| Trainline (LSE:TRN) | £2.644 | £5.24 | 49.6% |
| Franchise Brands (AIM:FRAN) | £1.325 | £2.47 | 46.4% |
| Deliveroo (LSE:ROO) | £1.202 | £2.25 | 46.5% |
| Vanquis Banking Group (LSE:VANQ) | £0.551 | £1.02 | 45.8% |
| Kromek Group (AIM:KMK) | £0.051 | £0.10 | 49.6% |
| CVS Group (AIM:CVSG) | £9.36 | £18.35 | 49% |
| Fintel (AIM:FNTL) | £2.17 | £4.24 | 48.8% |
| Optima Health (AIM:OPT) | £1.66 | £3.08 | 46% |
Let's uncover some gems from our specialized screener.
Burford Capital
Overview: Burford Capital Limited offers legal finance products and services globally, with a market cap of approximately £1.99 billion.
Operations: Burford Capital's revenue segments include Principal Finance generating $24.58 million and Asset Management and Other Services contributing $47.68 million.
Estimated Discount To Fair Value: 40.8%
Burford Capital is trading at £9.08, significantly below its estimated fair value of £15.35, suggesting it may be undervalued based on cash flows. Despite a challenging year with revenue falling to $546.09 million and net income dropping to $146.48 million, earnings are forecasted to grow 32% annually, outpacing the UK market's growth rate of 14%. However, profit margins remain negative and return on equity is expected to be modest at 8.1%.
Entain
Overview: Entain Plc operates as a sports-betting and gaming company with a market cap of £3.30 billion.
Operations: The company's revenue is segmented into CEE (£488 million), UK&I (£2.05 billion), and International (£2.57 billion).
Estimated Discount To Fair Value: 32.1%
Entain is trading at £5.16, below its estimated fair value of £7.61, indicating potential undervaluation based on cash flows. Despite reporting a net loss of £452.7 million for 2024, the company's earnings are expected to grow significantly by 101.76% annually over the next three years, surpassing market averages and leading to profitability. However, recent leadership changes may introduce some uncertainty in strategic direction and governance stability moving forward.