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As the FTSE 100 and FTSE 250 indices face downward pressure from weak trade data out of China, investors in the United Kingdom are closely monitoring global economic cues that have impacted commodity prices and corporate earnings. In this environment, identifying stocks that may be trading below their estimated value can offer potential opportunities for investors seeking to navigate market volatility while focusing on long-term fundamentals.
Top 10 Undervalued Stocks Based On Cash Flows In The United Kingdom
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| AstraZeneca (LSE:AZN) | £100.22 | £191.51 | 47.7% |
| Dr. Martens (LSE:DOCS) | £0.5945 | £1.13 | 47.3% |
| Aptitude Software Group (LSE:APTD) | £2.96 | £5.15 | 42.6% |
| Gooch & Housego (AIM:GHH) | £4.71 | £8.99 | 47.6% |
| Victorian Plumbing Group (AIM:VIC) | £0.808 | £1.41 | 42.5% |
| Informa (LSE:INF) | £7.986 | £15.26 | 47.7% |
| Duke Capital (AIM:DUKE) | £0.285 | £0.54 | 47.3% |
| Huddled Group (AIM:HUD) | £0.0325 | £0.065 | 49.9% |
| Vistry Group (LSE:VTY) | £6.134 | £11.34 | 45.9% |
| Deliveroo (LSE:ROO) | £1.75 | £3.08 | 43.1% |
Let's dive into some prime choices out of the screener.
Restore
Overview: Restore plc, with a market cap of £338.20 million, offers services to offices and workplaces in both the public and private sectors primarily in the United Kingdom.
Operations: The company's revenue segments consist of Datashred (£36 million), Technology (£36.10 million), Harrow Green (£35.30 million), and Information Management (£167.90 million).
Estimated Discount To Fair Value: 38.8%
Restore is trading at £2.47, significantly below its estimated fair value of £4.04, suggesting it may be undervalued based on cash flows. The company recently reported a net income of £12.4 million for 2024, rebounding from a loss the previous year. Earnings are forecast to grow at 24.8% annually, outpacing the UK market's growth rate and indicating strong future potential despite an unstable dividend history and lower revenue growth expectations relative to earnings growth.
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The growth report we've compiled suggests that Restore's future prospects could be on the up.
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Dive into the specifics of Restore here with our thorough financial health report.
Dr. Martens
Overview: Dr. Martens plc designs, develops, procures, markets, sells, and distributes footwear under the Dr. Martens brand and has a market cap of approximately £573.81 million.
Operations: The company's revenue is primarily derived from its footwear segment, totaling £805.90 million.
Estimated Discount To Fair Value: 47.3%
Dr. Martens is trading at £0.59, below its estimated fair value of £1.13, highlighting potential undervaluation based on cash flows. Despite a lower profit margin this year compared to last, earnings are expected to grow significantly at 39.72% annually over the next three years, outpacing the UK market's growth rate of 14.1%. However, interest payments are not well covered by earnings and the dividend track record remains unstable.