3 UK Stocks That May Be Trading At An Estimated Discount Of Up To 42.6%
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The United Kingdom's stock market has recently faced challenges, with the FTSE 100 index closing lower amid weak trade data from China, highlighting concerns about global economic recovery. In such an environment, identifying stocks that may be trading at an estimated discount can offer potential opportunities for investors seeking value amidst broader market uncertainties.
Top 10 Undervalued Stocks Based On Cash Flows In The United Kingdom
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| Vistry Group (LSE:VTY) | £5.894 | £11.72 | 49.7% |
| Victrex (LSE:VCT) | £7.82 | £15.58 | 49.8% |
| Just Group (LSE:JUST) | £1.476 | £2.95 | 50% |
| Informa (LSE:INF) | £7.972 | £14.49 | 45% |
| Huddled Group (AIM:HUD) | £0.033 | £0.06 | 44.8% |
| Gooch & Housego (AIM:GHH) | £5.46 | £10.92 | 50% |
| GlobalData (AIM:DATA) | £1.72 | £3.09 | 44.3% |
| Entain (LSE:ENT) | £7.414 | £13.57 | 45.4% |
| Duke Capital (AIM:DUKE) | £0.30 | £0.54 | 44.2% |
| Deliveroo (LSE:ROO) | £1.757 | £3.12 | 43.6% |
Below we spotlight a couple of our favorites from our exclusive screener.
Hollywood Bowl Group
Overview: Hollywood Bowl Group plc operates ten-pin bowling and mini-golf centers in the United Kingdom and internationally, with a market cap of £439.86 million.
Operations: The company generates revenue from its ten-pin bowling and mini-golf centers, amounting to £240.46 million in the recreational activities segment.
Estimated Discount To Fair Value: 10.2%
Hollywood Bowl Group is trading at a good value, 10.2% below its fair value estimate of £2.9, with analysts expecting a 51.4% price increase. Despite an unstable dividend track record, the company shows promise with earnings forecasted to grow faster than the UK market at 14.5%. Recent half-year results revealed revenue growth to £129.25 million from £119.19 million, although net income slightly decreased to £20.63 million from £21.95 million last year.
Coats Group
Overview: Coats Group plc, with a market cap of £1.22 billion, operates globally in thread manufacturing and produces structural components for apparel and footwear as well as performance materials.
Operations: The company generates revenue from three primary segments: Apparel ($769.80 million), Footwear ($403.50 million), and Performance Materials ($327.60 million).
Estimated Discount To Fair Value: 29.5%
Coats Group is trading at a significant discount, 29.5% below its estimated fair value of £1.09, with earnings expected to grow significantly faster than the UK market at 21.2%. Recent strategic decisions, including exiting non-core operations in the Americas Yarns business, are poised to enhance EBIT margins and generate modest cash inflows. Despite high-quality earnings impacted by one-off items and debt concerns relative to operating cash flow, analysts foresee a 53.5% price increase potential.