As the UK market grapples with challenges stemming from weak trade data in China, the FTSE 100 and FTSE 250 indices have shown signs of strain, reflecting broader concerns about global economic recovery. In such an environment, identifying undervalued stocks becomes crucial for investors seeking opportunities that may offer resilience and potential growth despite current market volatility.
Top 10 Undervalued Stocks Based On Cash Flows In The United Kingdom
Name | Current Price | Fair Value (Est) | Discount (Est) |
SigmaRoc (AIM:SRC) | £1.246 | £2.42 | 48.4% |
PageGroup (LSE:PAGE) | £2.218 | £4.43 | 50% |
LSL Property Services (LSE:LSL) | £2.95 | £5.60 | 47.3% |
Likewise Group (AIM:LIKE) | £0.28 | £0.53 | 46.8% |
Hollywood Bowl Group (LSE:BOWL) | £2.575 | £4.88 | 47.2% |
Gym Group (LSE:GYM) | £1.484 | £2.90 | 48.9% |
Gooch & Housego (AIM:GHH) | £5.58 | £10.84 | 48.5% |
Essentra (LSE:ESNT) | £0.988 | £1.95 | 49.3% |
Burberry Group (LSE:BRBY) | £10.685 | £20.92 | 48.9% |
AstraZeneca (LSE:AZN) | £113.46 | £221.92 | 48.9% |
Let's review some notable picks from our screened stocks.
Hollywood Bowl Group (LSE:BOWL)
Overview: Hollywood Bowl Group plc operates ten-pin bowling and mini-golf centers in the United Kingdom and internationally, with a market cap of £429.76 million.
Operations: The company's revenue is primarily derived from its recreational activities segment, amounting to £240.46 million.
Estimated Discount To Fair Value: 47.2%
Hollywood Bowl Group is trading at 47.2% below its estimated fair value, presenting an opportunity for investors focused on cash flow valuation. Its earnings are expected to grow at 14.5% annually, outpacing the UK market's average growth rate. Although revenue growth is moderate at 6.3%, it remains above the market average of 4.1%. Analysts anticipate a price increase of over 50%, despite an unstable dividend track record and slower-than-significant earnings growth projections.
- The analysis detailed in our Hollywood Bowl Group growth report hints at robust future financial performance.
- Click here and access our complete balance sheet health report to understand the dynamics of Hollywood Bowl Group.
Essentra (LSE:ESNT)
Overview: Essentra plc manufactures and distributes plastic injection moulded, vinyl dip moulded, and metal products across Europe, the Middle East, Africa, the Americas, and the Asia Pacific with a market cap of £282.15 million.
Operations: Essentra plc generates revenue through the production and distribution of plastic injection moulded, vinyl dip moulded, and metal items across various regions including Europe, the Middle East, Africa, the Americas, and the Asia Pacific.
Estimated Discount To Fair Value: 49.3%
Essentra is trading at 49.3% below its estimated fair value of £1.95, offering potential for investors focused on undervalued opportunities based on cash flows. Despite a recent earnings dip, with net income falling to £0.3 million for H1 2025, the company's earnings are forecast to grow significantly at 41.1% annually over the next three years, outpacing the UK market average. However, its dividend track record remains unstable and Return on Equity is projected low at 7.7%.
- Upon reviewing our latest growth report, Essentra's projected financial performance appears quite optimistic.
- Take a closer look at Essentra's balance sheet health here in our report.
Vistry Group (LSE:VTY)
Overview: Vistry Group PLC, with a market cap of £1.98 billion, operates in the United Kingdom providing housing solutions through its subsidiaries.
Operations: The company generates revenue of £3.69 billion from its Home Builders segment, which includes residential and commercial housing solutions in the UK.
Estimated Discount To Fair Value: 43.4%
Vistry Group, trading at 43.4% below its estimated fair value of £10.84, presents an opportunity for investors focused on undervalued stocks based on cash flows. Despite a decline in H1 2025 net income to £31.3 million and reduced profit margins of 1%, earnings are forecast to grow significantly at 39.9% annually, surpassing the UK market average growth rate. The strategic joint venture with Homes England further supports long-term revenue prospects through large-scale residential developments.
- Insights from our recent growth report point to a promising forecast for Vistry Group's business outlook.
- Navigate through the intricacies of Vistry Group with our comprehensive financial health report here.
Summing It All Up
- Click here to access our complete index of 51 Undervalued UK Stocks Based On Cash Flows.
- Invested in any of these stocks? Simplify your portfolio management with Simply Wall St and stay ahead with our alerts for any critical updates on your stocks.
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Curious About Other Options?
- 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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