GB Group And 2 UK Stocks That May Be Trading Below Intrinsic Value
In This Article:
The United Kingdom's FTSE 100 index recently faced declines, influenced by weak trade data from China and falling commodity prices. Amid these challenging market conditions, identifying undervalued stocks that may be trading below their intrinsic value can offer potential opportunities for investors.
Top 10 Undervalued Stocks Based On Cash Flows In The United Kingdom
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| Gaming Realms (AIM:GMR) | ￡0.41 | ￡0.77 | 46.8% |
| EnSilica (AIM:ENSI) | ￡0.445 | ￡0.82 | 45.9% |
| Tracsis (AIM:TRCS) | ￡5.90 | ￡11.42 | 48.3% |
| GlobalData (AIM:DATA) | ￡2.225 | ￡4.12 | 46% |
| C&C Group (LSE:CCR) | ￡1.512 | ￡2.90 | 47.9% |
| Mercia Asset Management (AIM:MERC) | ￡0.345 | ￡0.68 | 49.1% |
| Restore (AIM:RST) | ￡2.60 | ￡4.75 | 45.3% |
| Tortilla Mexican Grill (AIM:MEX) | ￡0.54 | ￡1.01 | 46.4% |
| SysGroup (AIM:SYS) | ￡0.34 | ￡0.66 | 48.8% |
| Nexxen International (AIM:NEXN) | ￡2.73 | ￡5.34 | 48.9% |
Let's explore several standout options from the results in the screener.
GB Group
Overview: GB Group plc, with a market cap of ￡841.50 million, provides identity data intelligence products and services in the United Kingdom, the United States, Australia, and internationally.
Operations: The company's revenue segments include ￡40.20 million from Fraud, ￡156.06 million from Identity, and ￡81.07 million from Location services.
Estimated Discount To Fair Value: 33.3%
GB Group is trading at ￡3.34, significantly below its estimated fair value of ￡5.01, indicating it is undervalued based on discounted cash flow analysis. Despite a net loss of ￡48.58 million for FY24, earnings are forecast to grow 92.89% annually over the next three years with revenue expected to increase by 6.8% per year, outpacing the UK market's 3.7%. Analysts also predict a stock price rise of 26.6%.
Bodycote
Overview: Bodycote plc, with a market cap of ￡1.18 billion, provides heat treatment and thermal processing services worldwide.
Operations: The company generates revenue from several segments: Aerospace, Defence & Energy (ADE) in North America (￡194.50 million), Western Europe (￡160 million), and Emerging Markets (￡8 million); and Automotive & General Industrial (AGI) in North America (￡97.60 million), Western Europe (￡237.30 million), and Emerging Markets (￡84 million).
Estimated Discount To Fair Value: 41%
Bodycote plc is trading at ￡6.34, significantly below its estimated fair value of ￡10.74, indicating it is undervalued based on discounted cash flow analysis. Despite a decline in sales and net income for H1 2024, the company’s earnings are forecast to grow 21.2% annually over the next three years, outpacing the UK market's growth rate of 14.1%. Recent leadership changes and dividend affirmations add further dimensions to its investment profile.