In This Article:
The United Kingdom's stock market has recently experienced a downturn, with the FTSE 100 and FTSE 250 indices closing lower amid weak trade data from China and declining commodity prices. As global economic challenges persist, investors may find opportunities in stocks that appear undervalued based on current market conditions. Identifying such stocks requires careful consideration of their intrinsic value relative to their market price, especially in a fluctuating economic environment.
Top 10 Undervalued Stocks Based On Cash Flows In The United Kingdom
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| Brickability Group (AIM:BRCK) | £0.59 | £1.04 | 43.5% |
| On the Beach Group (LSE:OTB) | £2.605 | £4.59 | 43.3% |
| Gateley (Holdings) (AIM:GTLY) | £1.36 | £2.64 | 48.5% |
| Victrex (LSE:VCT) | £9.66 | £18.19 | 46.9% |
| Duke Capital (AIM:DUKE) | £0.3025 | £0.53 | 43.2% |
| Deliveroo (LSE:ROO) | £1.406 | £2.43 | 42.2% |
| Likewise Group (AIM:LIKE) | £0.19 | £0.37 | 48.8% |
| Nexxen International (AIM:NEXN) | £8.06 | £15.27 | 47.2% |
| Optima Health (AIM:OPT) | £1.775 | £3.31 | 46.3% |
| Melrose Industries (LSE:MRO) | £6.434 | £11.85 | 45.7% |
Let's dive into some prime choices out of the screener.
Warpaint London
Overview: Warpaint London PLC, with a market cap of £331.23 million, produces and sells cosmetics through its subsidiaries.
Operations: The company's revenue is derived from two primary segments: Close-Out, contributing £2.12 million, and Own Brand, generating £96.72 million.
Estimated Discount To Fair Value: 30.4%
Warpaint London is trading at £4.1, below its estimated fair value of £5.89, suggesting it may be undervalued based on cash flows. The company expects revenue of approximately £102 million for 2024 and has completed follow-on equity offerings totaling nearly £15 million, enhancing liquidity. Despite high share price volatility, earnings grew by a very large amount over the past year and are forecast to grow faster than the UK market, indicating potential for future growth.
NewRiver REIT
Overview: NewRiver REIT plc is a prominent Real Estate Investment Trust focused on acquiring, managing, and developing durable retail assets across the UK, with a market cap of £347.55 million.
Operations: NewRiver REIT generates revenue primarily through its activities in acquiring, managing, and developing robust retail properties across the UK.
Estimated Discount To Fair Value: 31.9%