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The UK stock market has recently faced challenges, with the FTSE 100 index experiencing declines due to weak trade data from China, highlighting concerns over global economic recovery and its impact on companies closely tied to Chinese fortunes. Amid these market conditions, identifying undervalued stocks can offer potential opportunities for investors seeking assets priced below their intrinsic value, especially when broader indices are under pressure.
Top 10 Undervalued Stocks Based On Cash Flows In The United Kingdom
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| Pan African Resources (AIM:PAF) | £0.4005 | £0.76 | 47.2% |
| On the Beach Group (LSE:OTB) | £2.43 | £4.71 | 48.4% |
| Informa (LSE:INF) | £7.85 | £15.43 | 49.1% |
| AstraZeneca (LSE:AZN) | £114.52 | £218.61 | 47.6% |
| Victrex (LSE:VCT) | £9.25 | £18.31 | 49.5% |
| Likewise Group (AIM:LIKE) | £0.185 | £0.37 | 50% |
| Harbour Energy (LSE:HBR) | £1.9545 | £3.68 | 46.9% |
| TI Fluid Systems (LSE:TIFS) | £1.968 | £3.75 | 47.5% |
| Vanquis Banking Group (LSE:VANQ) | £0.612 | £1.13 | 45.9% |
| Crest Nicholson Holdings (LSE:CRST) | £1.657 | £3.20 | 48.2% |
Here we highlight a subset of our preferred stocks from the screener.
On the Beach Group
Overview: On the Beach Group plc is an online retailer specializing in short-haul beach holidays under the On the Beach brand in the United Kingdom, with a market cap of £380.23 million.
Operations: The company's revenue segments include £9 million from Classic Collection and £119.20 million from OTB, which encompasses Onthebeach.Co.Uk and Sunshine.Co.Uk.
Estimated Discount To Fair Value: 48.4%
On the Beach Group is trading at £2.43, significantly undervalued compared to its estimated fair value of £4.71, offering a potential opportunity based on cash flow analysis. Earnings grew by 69.7% last year and are forecasted to grow at 20.7% annually, outpacing the UK market's growth rate of 13.9%. However, its Return on Equity is expected to be relatively low at 18.4% in three years despite strong revenue growth projections of 10.4% annually.
WH Smith
Overview: WH Smith PLC is a travel retailer operating in the UK, North America, Australia, Ireland, Spain, and internationally with a market cap of £1.35 billion.
Operations: The company's revenue segments include £452 million from High Street operations and a total of £1.47 billion from Travel, broken down as £795 million in Travel UK, £401 million in North America, and £270 million in the Rest of The World.