3 UK Stocks Estimated To Be Undervalued By Up To 48%
In This Article:
The United Kingdom's stock market has recently faced challenges, with the FTSE 100 closing lower due to weak trade data from China, highlighting concerns over global economic recovery. In this environment of uncertainty and fluctuating indices, identifying undervalued stocks can offer potential opportunities for investors seeking value in a market impacted by external economic pressures.
Top 10 Undervalued Stocks Based On Cash Flows In The United Kingdom
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| GlobalData (AIM:DATA) | ￡1.89 | ￡3.73 | 49.3% |
| AstraZeneca (LSE:AZN) | ￡116.96 | ￡220.52 | 47% |
| Watches of Switzerland Group (LSE:WOSG) | ￡4.358 | ￡8.48 | 48.6% |
| S&U (LSE:SUS) | ￡19.15 | ￡36.55 | 47.6% |
| Informa (LSE:INF) | ￡8.206 | ￡15.42 | 46.8% |
| Gulf Keystone Petroleum (LSE:GKP) | ￡1.283 | ￡2.47 | 48% |
| St. James's Place (LSE:STJ) | ￡8.61 | ￡16.69 | 48.4% |
| Foxtons Group (LSE:FOXT) | ￡0.616 | ￡1.19 | 48.2% |
| Auction Technology Group (LSE:ATG) | ￡4.465 | ￡8.40 | 46.9% |
| Genel Energy (LSE:GENL) | ￡0.765 | ￡1.51 | 49.4% |
Let's dive into some prime choices out of the screener.
Gulf Keystone Petroleum
Overview: Gulf Keystone Petroleum Limited is involved in the exploration, development, and production of oil and gas in the Kurdistan Region of Iraq, with a market cap of ￡279.46 million.
Operations: The company's revenue is primarily derived from its exploration and production activities in the oil and gas sector, amounting to $115.15 million.
Estimated Discount To Fair Value: 48%
Gulf Keystone Petroleum appears undervalued based on cash flows, trading at ￡1.28, significantly below its estimated fair value of ￡2.47. The company is expected to see revenue growth of 39.8% per year, outpacing the UK market's 3.6%. However, its dividend yield of 11.07% is not well covered by earnings or free cash flows, raising sustainability concerns despite recent dividend declarations totaling $20 million for interim payments in October 2024.
Stelrad Group
Overview: Stelrad Group PLC manufactures and distributes radiators across the United Kingdom, Ireland, Europe, Turkey, and internationally with a market cap of ￡196.12 million.
Operations: The company's revenue from the manufacture and distribution of radiators is ￡294.27 million.
Estimated Discount To Fair Value: 41.8%
Stelrad Group is trading at ￡1.53, significantly below its estimated fair value of ￡2.63, indicating it may be undervalued based on cash flows. Despite a high debt level, earnings are expected to grow 14.52% annually, surpassing the UK market's growth rate of 13.9%. Recent executive changes include Leigh Wilcox as CFO and board member, enhancing financial leadership stability amid a modest dividend increase to 2.98 pence per share.