3 UK Stocks That May Be Undervalued In September 2024

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The UK stock market has been facing headwinds, with the FTSE 100 and FTSE 250 indices closing lower amid weak trade data from China and declining commodity prices. Despite these challenges, there are opportunities to find undervalued stocks that may offer potential for growth as the market adjusts. In this article, we will explore three UK stocks that may be undervalued in September 2024. Identifying such stocks involves looking for companies with strong fundamentals that have been overlooked due to broader market concerns.

Top 10 Undervalued Stocks Based On Cash Flows In The United Kingdom

Name

Current Price

Fair Value (Est)

Discount (Est)

Gaming Realms (AIM:GMR)

£0.39

£0.76

48.9%

GlobalData (AIM:DATA)

£2.18

£4.10

46.8%

Topps Tiles (LSE:TPT)

£0.4755

£0.91

47.8%

AstraZeneca (LSE:AZN)

£125.40

£245.12

48.8%

Mercia Asset Management (AIM:MERC)

£0.355

£0.68

48.1%

Redcentric (AIM:RCN)

£1.29

£2.46

47.5%

Ricardo (LSE:RCDO)

£5.20

£10.18

48.9%

Foxtons Group (LSE:FOXT)

£0.618

£1.21

48.9%

Velocity Composites (AIM:VEL)

£0.425

£0.83

48.6%

Tortilla Mexican Grill (AIM:MEX)

£0.51

£1.01

49.4%

Click here to see the full list of 56 stocks from our Undervalued UK Stocks Based On Cash Flows screener.

Let's uncover some gems from our specialized screener.

Barratt Developments

Overview: Barratt Developments plc is a UK-based company specializing in housebuilding, with a market cap of £7.31 billion.

Operations: The company's revenue segments include private housing at £3.92 billion, affordable housing at £0.68 billion, and commercial developments at £0.09 billion.

Estimated Discount To Fair Value: 40.5%

Barratt Developments plc reported a significant decline in earnings for the year ended June 30, 2024, with net income dropping to £114.1 million from £530.3 million a year ago. Despite this, the stock is trading at 40.5% below its estimated fair value of £8.5 per share and is expected to see annual profit growth of 45.9%. However, dividends have been reduced and are not well covered by earnings or free cash flows, reflecting current financial pressures.

LSE:BDEV Discounted Cash Flow as at Sep 2024
LSE:BDEV Discounted Cash Flow as at Sep 2024

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, infrastructure, direct lending and credit opportunities in private credit investments with a market cap of £2.48 billion.

Operations: The company's revenue segments include £3.60 million from Central operations, £74.50 million from Private Credit, and £285.60 million from Private Equity.