3 UK Stocks Trading At Up To 49.3% Below Intrinsic Value
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The United Kingdom's FTSE 100 index recently faced setbacks due to weak trade data from China, highlighting the interconnected nature of global economies. Despite these challenges, there are still opportunities to find undervalued stocks that could offer significant potential for investors.
Top 10 Undervalued Stocks Based On Cash Flows In The United Kingdom
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| Liontrust Asset Management (LSE:LIO) | ￡6.26 | ￡12.34 | 49.3% |
| Gaming Realms (AIM:GMR) | ￡0.40 | ￡0.77 | 48.1% |
| Tracsis (AIM:TRCS) | ￡6.00 | ￡11.42 | 47.5% |
| GlobalData (AIM:DATA) | ￡2.215 | ￡4.12 | 46.2% |
| C&C Group (LSE:CCR) | ￡1.518 | ￡2.90 | 47.7% |
| Mercia Asset Management (AIM:MERC) | ￡0.345 | ￡0.68 | 49.1% |
| Foxtons Group (LSE:FOXT) | ￡0.65 | ￡1.22 | 46.9% |
| Tortilla Mexican Grill (AIM:MEX) | ￡0.525 | ￡1.01 | 47.9% |
| SysGroup (AIM:SYS) | ￡0.34 | ￡0.66 | 48.8% |
| Nexxen International (AIM:NEXN) | ￡2.745 | ￡5.34 | 48.6% |
Underneath we present a selection of stocks filtered out by our screen.
LBG Media
Overview: LBG Media plc operates as an online media publisher in the United Kingdom, Ireland, Australia, the United States, and internationally with a market cap of ￡275.99 million.
Operations: LBG Media generates ￡67.51 million in revenue from its online media publishing industry.
Estimated Discount To Fair Value: 21%
LBG Media is trading at ￡1.32, which is 21% below its estimated fair value of ￡1.67, indicating it may be undervalued based on cash flows. Despite recent volatility, LBG's earnings are forecast to grow significantly at 43.84% per year, outpacing the UK market's 14.1%. Revenue grew by 7.5% over the past year and is expected to continue growing faster than the UK market at 11.7% per year, though profit margins have decreased from 8.6% to 0.9%.
Babcock International Group
Overview: Babcock International Group PLC, with a market cap of ￡2.64 billion, specializes in the design, development, manufacture, and integration of specialist systems for aerospace, defense, and security across the UK and internationally.
Operations: The company's revenue segments are comprised of ￡1.10 billion from Land, ￡1.43 billion from Marine, ￡1.52 billion from Nuclear, and ￡341.50 million from Aviation.
Estimated Discount To Fair Value: 22.8%
Babcock International Group is trading at ￡5.24, which is 22.8% below its estimated fair value of ￡6.78, suggesting it may be undervalued based on cash flows. The company reported a net income of ￡165.7 million for FY24, a significant turnaround from the previous year's net loss of ￡35 million. Earnings are forecast to grow at 15.44% per year, outpacing the UK market's 14.1%. Despite high debt levels, Babcock's return on equity is expected to reach 30.5% in three years.