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The UK stock market has recently faced headwinds, with the FTSE 100 index experiencing declines due to weak trade data from China, highlighting concerns over global economic recovery. In such a challenging environment, identifying stocks that may be trading below their intrinsic value can offer potential opportunities for investors seeking to navigate these turbulent times.
Top 10 Undervalued Stocks Based On Cash Flows In The United Kingdom
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| Gaming Realms (AIM:GMR) | £0.3665 | £0.73 | 49.6% |
| Fevertree Drinks (AIM:FEVR) | £6.90 | £12.80 | 46.1% |
| TBC Bank Group (LSE:TBCG) | £32.40 | £63.18 | 48.7% |
| Victorian Plumbing Group (AIM:VIC) | £1.12 | £2.06 | 45.6% |
| GlobalData (AIM:DATA) | £2.04 | £3.72 | 45.2% |
| BATM Advanced Communications (LSE:BVC) | £0.193 | £0.38 | 49.2% |
| Videndum (LSE:VID) | £2.50 | £4.61 | 45.7% |
| Auction Technology Group (LSE:ATG) | £4.45 | £8.19 | 45.6% |
| St. James's Place (LSE:STJ) | £8.48 | £16.58 | 48.9% |
| Genel Energy (LSE:GENL) | £0.833 | £1.56 | 46.4% |
Let's dive into some prime choices out of the screener.
GlobalData
Overview: GlobalData Plc, along with its subsidiaries, offers business information through proprietary data, analytics, and insights across Europe, North America, and the Asia Pacific regions with a market cap of £1.63 billion.
Operations: The company's revenue segment comprises £276.80 million from its data, analytics, and insights services across Europe, North America, and the Asia Pacific.
Estimated Discount To Fair Value: 45.2%
GlobalData is trading at £2.04, significantly below its estimated fair value of £3.72, suggesting it may be undervalued based on cash flows. Analysts forecast earnings growth of 27.7% annually, outpacing the UK market's 14.6%, with revenue expected to grow faster than the market at 7.5% per year. Despite a dividend yield of 2.3% not being well-covered by earnings, no substantial insider selling has occurred recently, indicating potential confidence in future prospects.
WH Smith
Overview: WH Smith PLC is a retailer operating in the United Kingdom and internationally, with a market cap of £1.63 billion.
Operations: The company generates revenue from its High Street segment (£452 million) and Travel segments, which include Travel UK (£795 million), North America (£401 million), and Rest of the World (£270 million).
Estimated Discount To Fair Value: 23.5%