The UK stock market has faced challenges recently, with the FTSE 100 index closing lower due to weak trade data from China and falling commodity prices impacting major companies. Despite these hurdles, there are opportunities for investors to find stocks trading below their intrinsic value, which can be particularly appealing in a volatile market environment.
Top 10 Undervalued Stocks Based On Cash Flows In The United Kingdom
Name | Current Price | Fair Value (Est) | Discount (Est) |
Liontrust Asset Management (LSE:LIO) | £6.38 | £12.30 | 48.1% |
Gaming Realms (AIM:GMR) | £0.404 | £0.77 | 47.6% |
EnSilica (AIM:ENSI) | £0.445 | £0.82 | 45.8% |
AstraZeneca (LSE:AZN) | £126.10 | £244.26 | 48.4% |
Mercia Asset Management (AIM:MERC) | £0.348 | £0.68 | 48.5% |
Restore (AIM:RST) | £2.58 | £4.74 | 45.5% |
Ricardo (LSE:RCDO) | £5.16 | £10.23 | 49.6% |
Franchise Brands (AIM:FRAN) | £1.815 | £3.61 | 49.8% |
Tortilla Mexican Grill (AIM:MEX) | £0.54 | £1.01 | 46.4% |
Nexxen International (AIM:NEXN) | £2.74 | £5.36 | 48.9% |
Underneath we present a selection of stocks filtered out by our screen.
Bridgepoint Group
Overview: Bridgepoint Group plc is a private equity and private credit firm focusing on middle market, small mid cap, small cap, growth capital, buyouts investments, syndicate debt, direct lending and credit opportunities in private credit investments with a market cap of £2.24 billion.
Operations: The company's revenue segments include £3.60 million from Central, £74.50 million from Private Credit, and £285.60 million from Private Equity.
Estimated Discount To Fair Value: 23.8%
Bridgepoint Group appears undervalued based on cash flows, trading 23.8% below fair value estimates (£2.83 vs. £3.71). Despite lower profit margins (19.2%) compared to last year (40.7%), revenue and earnings are forecast to grow faster than the UK market at 18% and 33.3% per year respectively. Recent buybacks and dividend increases signal confidence, though current dividends are not well covered by earnings or free cash flows, raising sustainability concerns.
NCC Group
Overview: NCC Group plc operates in the cyber and software resilience sector across the United Kingdom, Asia-Pacific, North America, and Europe with a market cap of £490.77 million.
Operations: The company's revenue segments include £258.50 million from Cyber Security and £65.90 million from Escode.