3 UK Stocks That Might Be Undervalued By Up To 47.2%
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The United Kingdom's stock market has recently faced challenges, with the FTSE 100 index closing lower due to weak trade data from China and declining commodity prices impacting major companies. Despite these pressures, some stocks might be undervalued, presenting potential opportunities for investors who are vigilant in identifying companies with strong fundamentals that could weather current economic uncertainties.
Top 10 Undervalued Stocks Based On Cash Flows In The United Kingdom
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| GlobalData (AIM:DATA) | ￡1.98 | ￡3.72 | 46.8% |
| Franchise Brands (AIM:FRAN) | ￡1.445 | ￡2.63 | 45.1% |
| Tracsis (AIM:TRCS) | ￡5.50 | ￡9.97 | 44.8% |
| Redcentric (AIM:RCN) | ￡1.2925 | ￡2.43 | 46.8% |
| Mpac Group (AIM:MPAC) | ￡4.725 | ￡9.04 | 47.8% |
| Videndum (LSE:VID) | ￡2.45 | ￡4.54 | 46% |
| Foxtons Group (LSE:FOXT) | ￡0.636 | ￡1.20 | 47.2% |
| SysGroup (AIM:SYS) | ￡0.325 | ￡0.65 | 50% |
| BATM Advanced Communications (LSE:BVC) | ￡0.191 | ￡0.37 | 48.2% |
| Genel Energy (LSE:GENL) | ￡0.763 | ￡1.49 | 48.8% |
Let's take a closer look at a couple of our picks from the screened companies.
Judges Scientific
Overview: Judges Scientific plc designs, manufactures, and sells scientific instruments with a market cap of ￡640.22 million.
Operations: The company generates revenue from two main segments: Vacuum (￡65.40 million) and Materials Sciences (￡70.20 million).
Estimated Discount To Fair Value: 10.8%
Judges Scientific reported a net income increase to ￡4.2 million for H1 2024, up from ￡1 million the previous year, with earnings per share also rising significantly. Despite high debt levels and recent insider selling, its earnings growth is forecast at 23% annually—outpacing the UK market's 14.2%. Trading at ￡96.4, it is undervalued based on discounted cash flow analysis by approximately 10.8%, with analysts predicting a potential stock price rise of 26%.
Keywords Studios
Overview: Keywords Studios plc offers creative and technical services to the global video game industry, with a market cap of ￡1.96 billion.
Operations: The company generates revenue through its segments: Create (€365.56 million), Engage (€180.43 million), and Globalize (€261.61 million).
Estimated Discount To Fair Value: 20.1%
Keywords Studios is trading over 20% below its estimated fair value of ￡30.5, with a current price of ￡24.38, suggesting it may be undervalued based on discounted cash flow analysis. Despite reporting a net loss of €30.88 million for H1 2024, revenue grew to €440.43 million from €413.27 million year-on-year, and earnings are expected to grow significantly at 59.13% annually as the company aims for profitability within three years amidst faster-than-market revenue growth forecasts.