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The UK stock market has faced recent challenges, with the FTSE 100 closing lower due to weak trade data from China and a struggling domestic economy. Despite these headwinds, some stocks may be undervalued, presenting potential opportunities for investors who can identify companies with strong fundamentals and resilience in 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) | £0.385 | £0.76 | 49.5% |
| GlobalData (AIM:DATA) | £2.10 | £4.10 | 48.8% |
| Topps Tiles (LSE:TPT) | £0.4755 | £0.92 | 48.1% |
| AstraZeneca (LSE:AZN) | £126.50 | £245.82 | 48.5% |
| Mercia Asset Management (AIM:MERC) | £0.353 | £0.69 | 48.6% |
| Redcentric (AIM:RCN) | £1.2825 | £2.46 | 47.9% |
| Ricardo (LSE:RCDO) | £5.20 | £10.21 | 49% |
| Foxtons Group (LSE:FOXT) | £0.618 | £1.21 | 49% |
| Velocity Composites (AIM:VEL) | £0.43 | £0.83 | 48.2% |
| Tortilla Mexican Grill (AIM:MEX) | £0.505 | £1.01 | 49.9% |
We'll examine a selection from our screener results.
Tracsis
Overview: Tracsis plc, with a market cap of £207.81 million, provides software and hardware solutions along with data analytics/GIS services for the rail, traffic data, and transportation industries through its subsidiaries.
Operations: The company's revenue segments include Rail Technology & Services (£34.59 million) and Data, Analytics, Consultancy & Events (£44.80 million).
Estimated Discount To Fair Value: 32.2%
Tracsis (£6.85) is trading significantly below its estimated fair value of £10.11, making it an attractive option for those seeking undervalued stocks based on cash flows. The company's earnings are forecast to grow by 40.64% per year, outpacing the UK market's expected growth of 14.4%. Additionally, analysts agree that the stock price could rise by 84.9%, further supporting its potential as a strong investment opportunity in this category.
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 £461.97 million.
Operations: The company generates revenue from Cyber Security (£258.50 million) and Escode (£65.90 million).
Estimated Discount To Fair Value: 44.6%
NCC Group (£1.48) is trading significantly below its estimated fair value of £2.66, presenting a compelling case for undervaluation based on cash flows. Despite reporting a net loss of £24.9 million for the year ending May 31, 2024, NCC's revenue is forecast to grow at 4.5% annually, outpacing the UK market average of 3.7%. However, its dividend yield of 3.15% isn't well-covered by earnings and may pose sustainability concerns in the short term.