ConvaTec Group And 2 Other UK Stocks That May Be Priced Below Their Estimated Value
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As the United Kingdom's FTSE 100 index experiences fluctuations influenced by weak trade data from China, investors are closely examining opportunities within the market. In such a climate, identifying undervalued stocks can be crucial for those looking to capitalize on potential growth, especially when broader economic indicators suggest volatility.
Top 10 Undervalued Stocks Based On Cash Flows In The United Kingdom
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| Gaming Realms (AIM:GMR) | £0.383 | £0.73 | 47.6% |
| Victorian Plumbing Group (AIM:VIC) | £1.12 | £2.07 | 45.9% |
| Barratt Redrow (LSE:BTRW) | £4.029 | £7.39 | 45.4% |
| On the Beach Group (LSE:OTB) | £1.542 | £2.98 | 48.3% |
| Informa (LSE:INF) | £8.27 | £15.31 | 46% |
| Calnex Solutions (AIM:CLX) | £0.605 | £1.11 | 45.3% |
| Foxtons Group (LSE:FOXT) | £0.524 | £1.02 | 48.7% |
| Redcentric (AIM:RCN) | £1.1725 | £2.26 | 48.2% |
| Auction Technology Group (LSE:ATG) | £4.47 | £8.47 | 47.2% |
| Genel Energy (LSE:GENL) | £0.801 | £1.53 | 47.7% |
Let's take a closer look at a couple of our picks from the screened companies.
ConvaTec Group
Overview: ConvaTec Group PLC develops, manufactures, and sells medical products, services, and technologies across Europe, North America, and internationally with a market cap of £5.25 billion.
Operations: The company's revenue primarily stems from its development, manufacture, and sale of medical products and technologies, generating $2.20 billion.
Estimated Discount To Fair Value: 39%
ConvaTec Group is trading at £2.56, significantly below its estimated fair value of £4.20, indicating it may be undervalued based on cash flows. Despite a high debt level, earnings are expected to grow significantly at 20.86% annually over the next three years, outpacing the UK market's growth rate of 14.6%. Recent earnings grew by 117.9%, and revenue is forecast to increase by 5.8% per year, surpassing the UK market's average growth rate of 3.6%.
Sage Group
Overview: The Sage Group plc, along with its subsidiaries, offers technology solutions and services to small and medium businesses across the United States, the United Kingdom, France, and internationally, with a market cap of approximately £10.65 billion.
Operations: The company's revenue segments include £595 million from Europe, £1.01 billion from North America, and £488 million from the United Kingdom & Ireland.
Estimated Discount To Fair Value: 15.9%