3 UK Stocks Estimated To Be Trading At Up To 41.4% Discount

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The UK stock market has recently faced challenges, with the FTSE 100 closing lower due to weak trade data from China and falling commodity prices impacting key sectors. Despite these headwinds, there are opportunities for discerning investors to find undervalued stocks that may be trading at significant discounts. Identifying such stocks requires careful analysis of their fundamentals and potential for recovery in the current economic landscape.

Top 10 Undervalued Stocks Based On Cash Flows In The United Kingdom

Name

Current Price

Fair Value (Est)

Discount (Est)

Integrated Diagnostics Holdings (LSE:IDHC)

US$0.368

US$0.73

49.7%

GlobalData (AIM:DATA)

£2.09

£4.10

49.1%

Topps Tiles (LSE:TPT)

£0.47

£0.91

48.4%

AstraZeneca (LSE:AZN)

£127.12

£246.96

48.5%

Mercia Asset Management (AIM:MERC)

£0.353

£0.69

48.6%

Redcentric (AIM:RCN)

£1.29

£2.46

47.6%

Ricardo (LSE:RCDO)

£5.16

£10.19

49.4%

Velocity Composites (AIM:VEL)

£0.43

£0.83

48.2%

Tortilla Mexican Grill (AIM:MEX)

£0.51

£1.01

49.4%

Foxtons Group (LSE:FOXT)

£0.63

£1.22

48.2%

Click here to see the full list of 58 stocks from our Undervalued UK Stocks Based On Cash Flows screener.

Let's dive into some prime choices out of the screener.

JD Sports Fashion

Overview: JD Sports Fashion Plc is a retailer of branded sports fashion and outdoor clothing, footwear, accessories, and equipment for all ages across the UK, Ireland, Europe, North America, and internationally with a market cap of £7.04 billion.

Operations: The company's revenue segments include £9.98 billion from Sports Fashion and £559.90 million from Outdoor products.

Estimated Discount To Fair Value: 41.4%

JD Sports Fashion is trading at £1.36, significantly below its estimated fair value of £2.32, indicating it may be undervalued based on cash flows. Despite recent guidance suggesting revenue will be in the lower half of the expected range for 2024 due to currency headwinds, JD's earnings are forecast to grow at 15.87% per year, outpacing the UK market average. The company also boasts a high return on equity forecast of 23.2% in three years’ time.

LSE:JD. Discounted Cash Flow as at Sep 2024
LSE:JD. Discounted Cash Flow as at Sep 2024

Smith & Nephew

Overview: Smith & Nephew plc, with a market cap of £10.54 billion, develops, manufactures, markets, and sells medical devices and services in the United Kingdom and internationally.

Operations: The company's revenue segments include Orthopaedics ($2.26 billion), Sports Medicine & ENT ($1.77 billion), and Advanced Wound Management (AWM) ($1.61 billion).