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The UK stock market has recently faced challenges, with the FTSE 100 and FTSE 250 indices closing lower amid weak trade data from China, highlighting concerns about global economic recovery. Despite these headwinds, there are opportunities to find stocks that may be trading below their intrinsic value, offering potential for long-term growth.
Top 10 Undervalued Stocks Based On Cash Flows In The United Kingdom
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| Gaming Realms (AIM:GMR) | £0.38 | £0.76 | 49.9% |
| Triple Point Social Housing REIT (LSE:SOHO) | £0.658 | £1.30 | 49.3% |
| Topps Tiles (LSE:TPT) | £0.473 | £0.90 | 47.6% |
| Informa (LSE:INF) | £8.466 | £16.80 | 49.6% |
| Redcentric (AIM:RCN) | £1.2775 | £2.45 | 47.8% |
| Velocity Composites (AIM:VEL) | £0.435 | £0.82 | 47% |
| Tortilla Mexican Grill (AIM:MEX) | £0.515 | £1.01 | 48.9% |
| SysGroup (AIM:SYS) | £0.345 | £0.66 | 47.8% |
| Foxtons Group (LSE:FOXT) | £0.624 | £1.19 | 47.6% |
| Forterra (LSE:FORT) | £1.76 | £3.49 | 49.6% |
Let's review some notable picks from our screened stocks.
LBG Media
Overview: LBG Media plc operates as an online media publisher in the United Kingdom, Ireland, Australia, the United States, and internationally with a market cap of £290.62 million.
Operations: LBG Media generates £67.51 million in revenue from the online media publishing industry across its various markets.
Estimated Discount To Fair Value: 15.4%
LBG Media (£1.39) is trading 15.4% below its estimated fair value (£1.64). Despite a decline in profit margins from 8.6% to 0.9% over the past year, earnings are forecast to grow significantly at 43.84% per year, outpacing the UK market's expected growth of 14.2%. Revenue is also projected to increase by 11.7% annually, though this is slower than the desired growth rate of over 20%.
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The analysis detailed in our LBG Media growth report hints at robust future financial performance.
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Take a closer look at LBG Media's balance sheet health here in our report.
Forterra
Overview: Forterra plc manufactures and sells building products in the United Kingdom, with a market cap of £364.14 million.
Operations: Forterra's revenue segments include £67.70 million from Bespoke Products and £261.10 million from Bricks and Blocks.
Estimated Discount To Fair Value: 49.6%
Forterra (£1.76) is trading 49.6% below its estimated fair value (£3.49). Despite a drop in profit margins from 8.9% to 2.5% over the past year, earnings are forecast to grow significantly at 42.7% per year, surpassing the UK market's expected growth of 14.2%. However, revenue growth is projected at a slower rate of 8% annually, and recent earnings show a decline with net income dropping from £13.8 million to £9 million year-over-year for H1 2024.