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The recent performance of the United Kingdom's FTSE 100 index has been underwhelming, largely due to weak trade data from China and its ripple effects on global markets. Despite these challenges, there are still opportunities to find stocks that may be trading below their fair value estimates. Identifying such stocks requires a careful analysis of their fundamentals and market conditions, particularly in times of economic uncertainty.
Top 10 Undervalued Stocks Based On Cash Flows In The United Kingdom
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| Integrated Diagnostics Holdings (LSE:IDHC) | US$0.374 | US$0.73 | 48.6% |
| Liontrust Asset Management (LSE:LIO) | £6.25 | £12.31 | 49.2% |
| EnSilica (AIM:ENSI) | £0.42 | £0.82 | 48.5% |
| Gaming Realms (AIM:GMR) | £0.40 | £0.76 | 47.4% |
| Topps Tiles (LSE:TPT) | £0.46 | £0.89 | 48.5% |
| Velocity Composites (AIM:VEL) | £0.42 | £0.82 | 48.7% |
| Tortilla Mexican Grill (AIM:MEX) | £0.51 | £1.01 | 49.4% |
| Franchise Brands (AIM:FRAN) | £1.86 | £3.61 | 48.5% |
| Foxtons Group (LSE:FOXT) | £0.632 | £1.21 | 47.6% |
| Forterra (LSE:FORT) | £1.764 | £3.49 | 49.4% |
Let's take a closer look at a couple of our picks from the screened companies.
Avon Technologies
Overview: Avon Technologies Plc specializes in providing respiratory, chemical, biological, radiological, and nuclear head protection solutions for military and first responder agencies across the United Kingdom, Europe, and the United States with a market cap of £373.16 million.
Operations: Avon Technologies' revenue segments include Team Wendy, contributing $113.60 million, and a segment adjustment of $155.70 million.
Estimated Discount To Fair Value: 39.8%
Avon Technologies, trading at £12.44, is significantly undervalued based on discounted cash flow analysis with a fair value estimate of £20.66. Despite low forecasted Return on Equity (10.2%) in three years, the company’s earnings are projected to grow 118.7% annually and become profitable within that period, outpacing market growth rates. Recent strong operational performance and strategic contract wins further bolster its financial position despite interest payments not being well covered by earnings currently.
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Our growth report here indicates Avon Technologies may be poised for an improving outlook.
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Get an in-depth perspective on Avon Technologies' balance sheet by reading our health report here.
Videndum
Overview: Videndum Plc designs, manufactures, and distributes products and services for capturing and sharing content across broadcast, cinematic, video, photographic, and smartphone applications worldwide with a market cap of £322.13 million.