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In recent times, the UK market has experienced fluctuations, with the FTSE 100 index closing lower due to weak trade data from China and declining commodity prices affecting major sectors. Amidst these challenges, investors often seek opportunities in stocks that may be undervalued relative to their intrinsic worth, as these can offer potential for growth when broader market conditions stabilize. In this context, Bellway and two other UK stocks present intriguing cases for consideration as potentially undervalued investments.
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) | £2.36 | £4.59 | 48.5% |
| Brickability Group (AIM:BRCK) | £0.592 | £1.05 | 43.5% |
| Gaming Realms (AIM:GMR) | £0.3855 | £0.67 | 42.5% |
| Gateley (Holdings) (AIM:GTLY) | £1.375 | £2.64 | 48% |
| Victrex (LSE:VCT) | £9.53 | £18.15 | 47.5% |
| Duke Capital (AIM:DUKE) | £0.304 | £0.53 | 43% |
| Deliveroo (LSE:ROO) | £1.40 | £2.43 | 42.4% |
| Likewise Group (AIM:LIKE) | £0.185 | £0.37 | 49.8% |
| Optima Health (AIM:OPT) | £1.80 | £3.30 | 45.5% |
| Melrose Industries (LSE:MRO) | £6.338 | £11.83 | 46.4% |
Let's dive into some prime choices out of the screener.
Bellway
Overview: Bellway p.l.c., along with its subsidiaries, operates in the homebuilding industry across the United Kingdom and has a market capitalization of approximately £2.76 billion.
Operations: The company's revenue is primarily derived from its UK House Building segment, which generated £2.38 billion.
Estimated Discount To Fair Value: 19.1%
Bellway is trading at £23.28, below its estimated fair value of £28.78, representing a 19.1% discount. While revenue growth is forecasted at 9.9% annually, outpacing the UK market's 3.6%, profit margins have decreased from last year’s 10.7% to 5.5%. Although earnings are expected to grow significantly by over 20% annually for the next three years, the dividend yield of 2.32% lacks coverage by free cash flows, and ROE remains low at a projected 7.5%.
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Insights from our recent growth report point to a promising forecast for Bellway's business outlook.
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Click here to discover the nuances of Bellway with our detailed financial health report.
Crest Nicholson Holdings
Overview: Crest Nicholson Holdings plc is a UK-based company specializing in the construction of residential homes, with a market cap of £407.32 million.
Operations: The company's revenue is primarily derived from its home building segment, which includes residential and commercial projects, totaling £618.20 million.
Estimated Discount To Fair Value: 40.6%