3 UK Exchange Stocks Estimated To Be Up To 50% Undervalued
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The United Kingdom's FTSE 100 index has recently faced downward pressure, largely influenced by weak trade data from China and declining commodity prices. Despite these market challenges, identifying undervalued stocks can present significant opportunities for investors looking to capitalize on potential growth in a fluctuating economy.
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) | ￡30.80 | ￡58.81 | 47.6% |
| Integrated Diagnostics Holdings (LSE:IDHC) | US$0.378 | US$0.73 | 48.1% |
| Liontrust Asset Management (LSE:LIO) | ￡6.19 | ￡12.31 | 49.7% |
| Gaming Realms (AIM:GMR) | ￡0.40 | ￡0.76 | 47.4% |
| Ricardo (LSE:RCDO) | ￡5.06 | ￡10.12 | 50% |
| Velocity Composites (AIM:VEL) | ￡0.42 | ￡0.82 | 48.9% |
| Foxtons Group (LSE:FOXT) | ￡0.62 | ￡1.21 | 48.6% |
| Tortilla Mexican Grill (AIM:MEX) | ￡0.51 | ￡1.01 | 49.4% |
| Franchise Brands (AIM:FRAN) | ￡1.85 | ￡3.60 | 48.5% |
| Forterra (LSE:FORT) | ￡1.766 | ￡3.48 | 49.3% |
Below we spotlight a couple of our favorites from our exclusive screener.
Franchise Brands
Overview: Franchise Brands plc, with a market cap of ￡355.61 million, operates through its subsidiaries in franchising and related activities across the United Kingdom, North America, and Europe.
Operations: The company's revenue segments include Azura (￡0.75 million), Pirtek (￡41.95 million), B2C Division (￡6.11 million), Water & Waste (￡48.88 million), and Filta International (￡27.12 million).
Estimated Discount To Fair Value: 48.5%
Franchise Brands plc, trading at ￡1.85 and significantly below its estimated fair value of ￡3.60, shows strong potential as an undervalued stock based on cash flows. Despite recent executive changes and a drop in net income from ￡8.13 million to ￡3.04 million for 2023, the company's revenue surged to ￡121.27 million from ￡69.84 million last year, with earnings forecasted to grow by 40.7% annually over the next three years—outpacing the UK market's growth rate of 14.3%.
Ricardo
Overview: Ricardo plc offers environmental, technical, and strategic consultancy services across various regions including the United Kingdom, Europe, North America, China, the rest of Asia, Australia, and internationally; it has a market cap of ￡314.81 million.
Operations: Ricardo's revenue segments include Rail (￡75.90 million), Defense (￡104.30 million), Performance Products (￡84.70 million), Energy & Environment (￡101.90 million), and Automotive and Industrial - Emerging (￡68.60 million) and Established (￡24.20 million).