3 UK Exchange Stocks Estimated To Be Undervalued By Up To 40.8%

The United Kingdom's FTSE 100 index has recently faced downward pressure, influenced by weak trade data from China, which has impacted companies heavily reliant on the Chinese market. Despite these challenges, identifying undervalued stocks can offer potential opportunities for investors seeking to capitalize on discrepancies between a company's market price and its intrinsic value during such turbulent times.

Top 10 Undervalued Stocks Based On Cash Flows In The United Kingdom

Name	Current Price	Fair Value (Est)	Discount (Est)
Gaming Realms (AIM:GMR)	£0.367	£0.72	48.9%
TBC Bank Group (LSE:TBCG)	£31.00	£60.03	48.4%
ASA International Group (LSE:ASAI)	£0.7325	£1.43	48.9%
GlobalData (AIM:DATA)	£1.90	£3.73	49.1%
Brickability Group (AIM:BRCK)	£0.646	£1.24	48%
Victorian Plumbing Group (AIM:VIC)	£1.085	£2.02	46.2%
Tracsis (AIM:TRCS)	£5.35	£9.79	45.3%
Informa (LSE:INF)	£8.418	£15.80	46.7%
BATM Advanced Communications (LSE:BVC)	£0.188	£0.37	48.8%
St. James's Place (LSE:STJ)	£8.64	£16.20	46.7%

Click here to see the full list of 59 stocks from our Undervalued UK Stocks Based On Cash Flows screener.

Let's uncover some gems from our specialized screener.

AO World (LSE:AO.)

Overview: AO World plc, along with its subsidiaries, operates in the online retailing of domestic appliances and ancillary services in the United Kingdom and Germany, with a market cap of £625.82 million.

Operations: The company generates revenue of £1.07 billion from its online retailing of domestic appliances and ancillary services in the United Kingdom and Germany.

Estimated Discount To Fair Value: 20.4%

AO World is trading over 20% below its estimated fair value, with earnings forecast to grow significantly at 20.2% annually, outpacing the UK market's growth rate. Recent results show a rise in sales to £512.1 million and net income of £11.2 million for the half-year ended September 2024, reflecting solid financial performance. The company has revised its full-year revenue guidance upwards, expecting over 10% growth in B2C Retail revenue.

• Upon reviewing our latest growth report, AO World's projected financial performance appears quite optimistic.
• Unlock comprehensive insights into our analysis of AO World stock in this financial health report.

Bellway (LSE:BWY)

Overview: Bellway p.l.c., along with its subsidiaries, operates in the homebuilding sector in the United Kingdom and has a market capitalization of approximately £2.99 billion.

Operations: The company's revenue is primarily derived from its UK house building segment, amounting to £2.38 billion.

Estimated Discount To Fair Value: 40.8%

Bellway is trading 40.8% below its estimated fair value of £42.57, with earnings expected to grow significantly at 21.7% annually, surpassing the UK market's growth rate. Despite a decline in recent net income to £130.5 million from £365 million last year, revenue is forecasted to rise by 9.7% per year, faster than the market average of 3.5%. However, profit margins have decreased and dividends are not well covered by free cash flows.

• Our expertly prepared growth report on Bellway implies its future financial outlook may be stronger than recent results.
• Dive into the specifics of Bellway here with our thorough financial health report.

Genus (LSE:GNS)

Overview: Genus plc is an animal genetics company with operations across North America, Latin America, the United Kingdom, Europe, the Middle East, Russia, Africa, and Asia; it has a market cap of approximately £1.08 billion.

Operations: The company's revenue segments include Genus ABS, which generated £314.90 million, and Genus PIC, contributing £352.50 million.

Estimated Discount To Fair Value: 28.2%

Genus is trading at £16.42, significantly below its estimated fair value of £22.87, presenting a potential undervaluation opportunity based on cash flows. Despite a decline in profit margins from 4.8% to 1.2%, earnings are forecasted to grow robustly at 36.94% annually, outpacing the UK market's growth rate of 14.9%. However, revenue growth remains modest at 4% per year and large one-off items have impacted financial results recently.

• Insights from our recent growth report point to a promising forecast for Genus' business outlook.
• Get an in-depth perspective on Genus' balance sheet by reading our health report here.

Summing It All Up

• Dive into all 59 of the Undervalued UK Stocks Based On Cash Flows we have identified here.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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