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The United Kingdom's stock market has recently faced challenges, with the FTSE 100 index experiencing declines due to weak trade data from China and falling commodity prices affecting major companies. Amid these broader market pressures, investors may find opportunities in stocks that appear undervalued by the market, offering potential value based on their fundamentals and resilience in navigating current economic conditions.
Top 10 Undervalued Stocks Based On Cash Flows In The United Kingdom
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| On the Beach Group (LSE:OTB) | £2.58 | £4.59 | 43.8% |
| Brickability Group (AIM:BRCK) | £0.60 | £1.05 | 42.7% |
| Gateley (Holdings) (AIM:GTLY) | £1.36 | £2.64 | 48.5% |
| Victrex (LSE:VCT) | £9.69 | £18.19 | 46.7% |
| Duke Capital (AIM:DUKE) | £0.3025 | £0.53 | 43.2% |
| Deliveroo (LSE:ROO) | £1.391 | £2.43 | 42.8% |
| Likewise Group (AIM:LIKE) | £0.185 | £0.37 | 49.8% |
| Nexxen International (AIM:NEXN) | £8.06 | £15.29 | 47.3% |
| Optima Health (AIM:OPT) | £1.74 | £3.30 | 47.3% |
| Melrose Industries (LSE:MRO) | £6.32 | £11.83 | 46.6% |
Let's explore several standout options from the results in the screener.
Deliveroo
Overview: Deliveroo plc operates an online food delivery platform across several countries, including the UK and Ireland, with a market cap of £2.06 billion.
Operations: The company generates its revenue primarily from the operation of an on-demand food delivery platform, amounting to £2.04 billion.
Estimated Discount To Fair Value: 42.8%
Deliveroo is trading at £1.39, significantly below its estimated fair value of £2.43, indicating it is undervalued based on discounted cash flow analysis. Recently added to several FTSE indices, Deliveroo's earnings are expected to grow at 50.6% annually, outpacing the UK market's 14.9%. Despite revenue growth being slower than 20% per year, it surpasses the UK average of 3.7%. Recent revenue increases and profitability support its potential as an undervalued stock based on cash flows.
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The growth report we've compiled suggests that Deliveroo's future prospects could be on the up.
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Get an in-depth perspective on Deliveroo's balance sheet by reading our health report here.
Smith & Nephew
Overview: Smith & Nephew plc is a global medical devices company that develops, manufactures, markets, and sells its products and services in the UK and internationally, with a market cap of £8.94 billion.
Operations: The company's revenue segments include Orthopaedics at $2.26 billion, Sports Medicine & ENT at $1.77 billion, and Advanced Wound Management (AWM) at $1.61 billion.