UK Stocks Estimated To Be Up To 42.2% Below Intrinsic Value

The United Kingdom's FTSE 100 index has recently faced challenges, closing lower amid weak trade data from China, which has affected companies closely tied to the Chinese economy. As global economic uncertainties persist, identifying undervalued stocks can be a strategic approach for investors seeking opportunities in a market where intrinsic values may not yet be fully recognized.

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

Name	Current Price	Fair Value (Est)	Discount (Est)
Eurocell (LSE:ECEL)	£1.52	£2.95	48.4%
Gaming Realms (AIM:GMR)	£0.367	£0.66	44.5%
GlobalData (AIM:DATA)	£1.63	£3.06	46.7%
Phoenix Group Holdings (LSE:PHNX)	£5.145	£9.56	46.2%
AstraZeneca (LSE:AZN)	£118.42	£219.40	46%
Victrex (LSE:VCT)	£9.94	£18.26	45.6%
Likewise Group (AIM:LIKE)	£0.194	£0.37	47.6%
Ibstock (LSE:IBST)	£1.662	£3.06	45.8%
Kromek Group (AIM:KMK)	£0.059	£0.11	48.4%
Optima Health (AIM:OPT)	£1.82	£3.34	45.6%

Click here to see the full list of 54 stocks from our Undervalued UK Stocks Based On Cash Flows screener.

Underneath we present a selection of stocks filtered out by our screen.

Burford Capital (AIM:BUR)

Overview: Burford Capital Limited offers legal finance products and services globally, with a market capitalization of £2.19 billion.

Operations: Burford Capital generates revenue from its Principal Finance segment, which contributes $24.58 million, and Asset Management and Other Services, adding $47.68 million.

Estimated Discount To Fair Value: 31%

Burford Capital is trading at £9.99, significantly below its estimated fair value of £14.48, indicating it may be undervalued based on cash flows. Despite recent earnings challenges, with a net loss in the fourth quarter of 2024 and reduced annual revenue, the company is expected to achieve substantial earnings growth of 30.3% annually over the next three years, outpacing UK market forecasts and suggesting potential long-term value for investors focused on cash flow analysis.

• Our earnings growth report unveils the potential for significant increases in Burford Capital's future results.
• Click to explore a detailed breakdown of our findings in Burford Capital's balance sheet health report.

Entain (LSE:ENT)

Overview: Entain Plc is a sports-betting and gaming company with a market capitalization of approximately £4.23 billion.

Operations: Entain Plc's revenue is derived from several segments, including CEE (£488 million), UK&I (£2.05 billion), and International (£2.57 billion).

Estimated Discount To Fair Value: 31.7%

Entain is trading at £6.61, below its estimated fair value of £9.69, and offers potential for investors focused on cash flow analysis. Despite a net loss of £452.7 million in 2024, the company has improved from the previous year's larger loss and is forecast to achieve profitability within three years with earnings growth projected at over 148% annually. Recent board changes and a proposed dividend increase also highlight ongoing strategic adjustments.

• According our earnings growth report, there's an indication that Entain might be ready to expand.
• Click here and access our complete balance sheet health report to understand the dynamics of Entain.

Harbour Energy (LSE:HBR)

Overview: Harbour Energy plc, along with its subsidiaries, is involved in the acquisition, exploration, development, and production of oil and gas reserves with a market cap of approximately £3.20 billion.

Operations: Harbour Energy's revenue is primarily generated from its operations in the UK ($3.92 billion), Norway ($1.47 billion), and Corporate activities ($1.89 billion), with additional contributions from Southeast Asia ($257 million), Germany ($246 million), Argentina ($147 million), North Africa ($119 million), and Mexico ($60 million).

Estimated Discount To Fair Value: 42.2%

Harbour Energy, trading at £1.89, is significantly undervalued compared to its fair value estimate of £3.27, with a notable gap in cash flow valuation. Despite a net loss of US$108 million in 2024, revenue increased to US$6.23 billion from the previous year. The company plans strategic M&A and investments to optimize its portfolio while navigating shareholder dilution challenges and an unsustainable dividend yield of 10.83%.

• Our comprehensive growth report raises the possibility that Harbour Energy is poised for substantial financial growth.
• Get an in-depth perspective on Harbour Energy's balance sheet by reading our health report here.

Make It Happen

• Explore the 54 names from our Undervalued UK Stocks Based On Cash Flows screener here.
• Have you diversified into these companies? Leverage the power of Simply Wall St's portfolio to keep a close eye on market movements affecting your investments.
• Simply Wall St is your key to unlocking global market trends, a free user-friendly app for forward-thinking investors.

Contemplating Other Strategies?

• Explore high-performing small cap companies that haven't yet garnered significant analyst attention.
• Diversify your portfolio with solid dividend payers offering reliable income streams to weather potential market turbulence.
• Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management.

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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