UK's Top Undervalued Stock Estimates For September 2024
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The recent performance of the FTSE 100 and FTSE 250 indices has been impacted by weak trade data from China, highlighting ongoing challenges in global markets. Despite these headwinds, identifying undervalued stocks can present unique opportunities for investors looking to capitalize on potential market inefficiencies.
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$0.374 | US$0.73 | 48.7% |
| Liontrust Asset Management (LSE:LIO) | ￡6.19 | ￡12.31 | 49.7% |
| Topps Tiles (LSE:TPT) | ￡0.4755 | ￡0.91 | 47.5% |
| AstraZeneca (LSE:AZN) | ￡131.90 | ￡250.06 | 47.3% |
| Mercia Asset Management (AIM:MERC) | ￡0.358 | ￡0.68 | 47.4% |
| Ricardo (LSE:RCDO) | ￡5.10 | ￡10.13 | 49.6% |
| Velocity Composites (AIM:VEL) | ￡0.42 | ￡0.82 | 48.9% |
| Tortilla Mexican Grill (AIM:MEX) | ￡0.51 | ￡1.01 | 49.4% |
| Foxtons Group (LSE:FOXT) | ￡0.632 | ￡1.21 | 47.8% |
| Forterra (LSE:FORT) | ￡1.74 | ￡3.48 | 49.9% |
Let's take a closer look at a couple of our picks from the screened companies.
Fintel
Overview: Fintel Plc provides intermediary services and distribution channels to the retail financial services sector in the United Kingdom, with a market cap of ￡319.84 million.
Operations: Fintel Plc generates revenue through three main segments: Research & Fintech (￡22.30 million), Distribution Channels (￡20.20 million), and Intermediary Services (￡22.40 million).
Estimated Discount To Fair Value: 22.5%
Fintel (￡3.07) is trading at a 22.5% discount to its estimated fair value of ￡3.96, indicating it is undervalued based on cash flows. While earnings are forecast to grow significantly at 23.88% per year, revenue growth is slower at 8.6% per year but still outpaces the UK market's 3.7%. However, large one-off items have impacted financial results and Return on Equity is expected to be low (12.8%) in three years.
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The analysis detailed in our Fintel growth report hints at robust future financial performance.
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Dive into the specifics of Fintel here with our thorough financial health report.
Victorian Plumbing Group
Overview: Victorian Plumbing Group plc is an online retailer of bathroom products and accessories in the United Kingdom with a market cap of ￡322.44 million.
Operations: The company's revenue from online retailing of bathroom products and accessories in the United Kingdom amounts to ￡282.90 million.
Estimated Discount To Fair Value: 24.6%
Victorian Plumbing Group (￡0.99) is trading 24.6% below its estimated fair value of ￡1.31, highlighting its undervaluation based on cash flows. Earnings are forecast to grow significantly at 33.9% per year, outpacing the UK market's 14.4%. Revenue growth is also expected to be robust at 9.9% annually, faster than the broader market's 3.7%. However, significant insider selling over the past three months raises some concerns about internal confidence in future performance.