3 UK Stocks Estimated To Be Trading Below Their Intrinsic Value

The United Kingdom's stock market has recently faced challenges, with the FTSE 100 and FTSE 250 indices both closing lower amid concerns over weak trade data from China, highlighting global economic uncertainties. In such a climate, identifying stocks that are trading below their intrinsic value can be appealing to investors seeking potential opportunities for long-term growth despite broader market volatility.

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

Name	Current Price	Fair Value (Est)	Discount (Est)
Victorian Plumbing Group (AIM:VIC)	£1.105	£1.97	44%
On the Beach Group (LSE:OTB)	£1.532	£3.06	49.9%
S&U (LSE:SUS)	£18.80	£36.49	48.5%
Watches of Switzerland Group (LSE:WOSG)	£4.368	£8.47	48.4%
Informa (LSE:INF)	£8.28	£15.41	46.3%
Gulf Keystone Petroleum (LSE:GKP)	£1.33	£2.46	46%
Chemring Group (LSE:CHG)	£3.78	£6.81	44.5%
Foxtons Group (LSE:FOXT)	£0.606	£1.19	49.1%
St. James's Place (LSE:STJ)	£8.61	£16.44	47.6%
Genel Energy (LSE:GENL)	£0.773	£1.52	49%

Click here to see the full list of 58 stocks from our Undervalued UK Stocks Based On Cash Flows screener.

We're going to check out a few of the best picks from our screener tool.

TP ICAP Group (LSE:TCAP)

Overview: TP ICAP Group PLC offers intermediary services, trade execution, and data-led solutions across various regions including Europe, the Middle East, Africa, the Americas, and Asia Pacific with a market cap of £1.76 billion.

Operations: The company generates revenue from four main segments: Global Broking (£1.24 billion), Energy & Commodities (£471 million), Liquidnet (£323 million), and Parameta Solutions (£195 million).

Estimated Discount To Fair Value: 12.5%

TP ICAP Group appears undervalued based on cash flows, trading at £2.34, below its estimated fair value of £2.68. The company's earnings are forecast to grow significantly at 20.4% annually over the next three years, outpacing the UK market's growth rate. Recent financial results showed a net income increase to £91 million for H1 2024 from £66 million a year ago, supporting its potential for future profitability improvements despite slower revenue growth and dividend coverage concerns.

• Our expertly prepared growth report on TP ICAP Group implies its future financial outlook may be stronger than recent results.
• Get an in-depth perspective on TP ICAP Group's balance sheet by reading our health report here.

Videndum (LSE:VID)

Overview: Videndum Plc designs, manufactures, and distributes products and services for content capture and sharing in broadcast, cinematic, video, photographic, and smartphone applications globally with a market cap of £259.02 million.

Operations: The company's revenue is derived from three main segments: Media Solutions (£144.70 million), Creative Solutions (£54.90 million), and Production Solutions (£98 million).

Estimated Discount To Fair Value: 41.7%

Videndum is trading at £2.75, significantly below its estimated fair value of £4.72, highlighting its undervaluation based on cash flows. Despite recent challenges, including a drop from the S&P Global BMI Index and shareholder dilution, Videndum's revenue growth forecast of 8.9% annually surpasses the UK market average. The company reported a reduced net loss for H1 2024 compared to the previous year and is expected to achieve profitability within three years, reflecting potential for financial recovery.

• According our earnings growth report, there's an indication that Videndum might be ready to expand.
• Delve into the full analysis health report here for a deeper understanding of Videndum.

W.A.G payment solutions (LSE:WPS)

Overview: W.A.G payment solutions plc operates an integrated payments and mobility platform targeting the commercial road transportation industry primarily in Europe, with a market cap of approximately £565.37 million.

Operations: The company's revenue is derived from its Payment Solutions segment, generating €2.10 billion, and its Mobility Solutions segment, contributing €124.13 million.

Estimated Discount To Fair Value: 12.2%

W.A.G payment solutions is trading at £0.82, below its estimated fair value of £0.93, suggesting it is undervalued based on cash flows. The company's revenue growth forecast of 8.9% annually exceeds the UK market average, though it faces challenges with interest payments not well covered by earnings and a decline in net income for H1 2024 compared to the previous year. However, profitability is expected within three years, indicating potential upside.

• Our growth report here indicates W.A.G payment solutions may be poised for an improving outlook.
• Click here to discover the nuances of W.A.G payment solutions with our detailed financial health report.

Where To Now?

• Investigate our full lineup of 58 Undervalued UK Stocks Based On Cash Flows right here.
• Shareholder in one or more of these companies? Ensure you're never caught off-guard by adding your portfolio in Simply Wall St for timely alerts on significant stock developments.
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Searching for a Fresh Perspective?

• Explore high-performing small cap companies that haven't yet garnered significant analyst attention.
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• 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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