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The United Kingdom's FTSE 100 index has recently faced challenges, closing lower amid weak trade data from China and global economic uncertainties. Despite these headwinds, investors can find opportunities in stocks that are estimated to be trading below their fair value, offering potential for growth as market conditions stabilize.
Top 10 Undervalued Stocks Based On Cash Flows In The United Kingdom
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| TBC Bank Group (LSE:TBCG) | £30.60 | £59.05 | 48.2% |
| Gaming Realms (AIM:GMR) | £0.39 | £0.77 | 49% |
| Liontrust Asset Management (LSE:LIO) | £6.49 | £12.29 | 47.2% |
| Marks Electrical Group (AIM:MRK) | £0.65 | £1.27 | 48.9% |
| C&C Group (LSE:CCR) | £1.54 | £3.00 | 48.7% |
| AstraZeneca (LSE:AZN) | £130.50 | £252.34 | 48.3% |
| Mercia Asset Management (AIM:MERC) | £0.35 | £0.68 | 48.2% |
| Franchise Brands (AIM:FRAN) | £1.805 | £3.61 | 50% |
| Tortilla Mexican Grill (AIM:MEX) | £0.52 | £1.01 | 48.4% |
| Forterra (LSE:FORT) | £1.764 | £3.52 | 49.9% |
Let's take a closer look at a couple of our picks from the screened companies.
Bridgepoint Group
Overview: Bridgepoint Group plc is a private equity and private credit firm specializing in various investment strategies including middle market, small mid cap, small cap, growth capital, buyouts, syndicate debt, direct lending and credit opportunities with a market cap of £2.40 billion.
Operations: Revenue from Bridgepoint Group plc's segments is comprised of £285.60 million from Private Equity and £74.50 million from Private Credit.
Estimated Discount To Fair Value: 20.4%
Bridgepoint Group is trading 20.4% below its estimated fair value of £3.81, making it an attractive option for undervalued stocks based on cash flows. Despite a decline in profit margins to 19.2%, earnings are forecast to grow significantly at 33.17% annually over the next three years, outpacing the UK market's growth rate of 14.3%. Recent M&A rumors and share buybacks further highlight the company's proactive financial strategies amidst evolving market conditions.
NCC Group
Overview: NCC Group plc operates in the cyber and software resilience sector across the United Kingdom, Asia-Pacific, North America, and Europe with a market cap of £496.40 million.
Operations: The company's revenue segments include £258.50 million from Cyber Security and £65.90 million from Escode.
Estimated Discount To Fair Value: 40.6%