Exploring Three UK Exchange Stocks Estimated To Be Up To 47.2% Below Intrinsic Value

Recent performance in the UK markets has been tepid, with the FTSE 100 and FTSE 250 indices both closing lower, influenced by disappointing trade data from China. In such a market environment, identifying stocks that appear undervalued relative to their intrinsic value could present opportunities for discerning investors.

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

Name	Current Price	Fair Value (Est)	Discount (Est)
Begbies Traynor Group (AIM:BEG)	£1.02	£1.98	48.5%
Gaming Realms (AIM:GMR)	£0.366	£0.69	46.7%
WPP (LSE:WPP)	£7.488	£14.19	47.2%
LSL Property Services (LSE:LSL)	£3.36	£6.38	47.4%
Loungers (AIM:LGRS)	£2.80	£5.50	49.1%
Accsys Technologies (AIM:AXS)	£0.544	£1.05	48.2%
Entain (LSE:ENT)	£6.56	£12.36	46.9%
Tortilla Mexican Grill (AIM:MEX)	£0.60	£1.11	46.1%
Nexxen International (AIM:NEXN)	£2.435	£4.75	48.7%
M&C Saatchi (AIM:SAA)	£2.05	£3.99	48.6%

Click here to see the full list of 62 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.

Avon Protection (LSE:AVON)

Overview: Avon Protection plc specializes in providing respiratory and head protection solutions for military and first responder agencies across the UK, Europe, and the US, with a market capitalization of approximately £383.95 million.

Operations: The company's revenue segments include Team Wendy, which generated $113.60 million.

Estimated Discount To Fair Value: 33.5%

Avon Protection, currently trading at £12.8—33.5% below its estimated fair value of £19.24—shows potential for significant financial improvement. Despite a forecasted low return on equity of 10.5% in three years, the company is expected to grow earnings by 122.62% annually and become profitable within the same period. Recent corporate guidance predicts a revenue increase of approximately 10% for fiscal year 2024, highlighting positive momentum despite a reduced interim dividend and past losses in earnings reports.

• Insights from our recent growth report point to a promising forecast for Avon Protection's business outlook.
• Unlock comprehensive insights into our analysis of Avon Protection stock in this financial health report.

Genel Energy (LSE:GENL)

Overview: Genel Energy plc is an independent oil and gas exploration and production company with a market capitalization of approximately £265.54 million.

Operations: The company generates its revenue primarily from oil and gas production, totaling $84.80 million.

Estimated Discount To Fair Value: 23.9%

Genel Energy, priced at £0.96, is positioned below its calculated fair value of £1.26, indicating a substantial undervaluation by over 20%. The company's revenue is expected to increase by 11.8% annually, outpacing the UK market's average of 3.5%. Although its return on equity is projected to be low at 5% in three years, earnings are anticipated to surge by 53.41% per year during this period. Recent operational updates show a production increase in Q1 2024 compared to Q4 2023.

• Upon reviewing our latest growth report, Genel Energy's projected financial performance appears quite optimistic.
• Get an in-depth perspective on Genel Energy's balance sheet by reading our health report here.

WPP (LSE:WPP)

Overview: WPP plc is a creative transformation company offering communications, experience, commerce, and technology services worldwide, with a market capitalization of approximately £8.03 billion.

Operations: WPP's revenue is primarily generated from three segments: Public Relations (£1.26 billion), Specialist Agencies (£0.99 billion), and Global Integrated Agencies (£12.59 billion).

Estimated Discount To Fair Value: 47.2%

WPP, priced at £7.49, trades significantly below its estimated fair value of £14.19, highlighting a potential undervaluation. Despite reaffirming modest revenue growth expectations for 2024, WPP's earnings are projected to rise by 28.23% annually over the next three years, outperforming the UK market projection of 12.6%. However, concerns persist as its profit margins have dipped from last year and dividend coverage remains weak due to insufficient earnings support.

• Our earnings growth report unveils the potential for significant increases in WPP's future results.
• Click here to discover the nuances of WPP with our detailed financial health report.

Taking Advantage

• Take a closer look at our Undervalued UK Stocks Based On Cash Flows list of 62 companies by clicking here.
• Are any of these part of your asset mix? Tap into the analytical power of Simply Wall St's portfolio to get a 360-degree view on how they're shaping up.
• Streamline your investment strategy with Simply Wall St's app for free and benefit from extensive research on stocks across all corners of the world.

Interested In Other Possibilities?

• 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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