The UK stock market has recently faced challenges, with the FTSE 100 and FTSE 250 indices experiencing declines amid concerns over weak trade data from China and its impact on global demand. As investors navigate these turbulent waters, the search for value stocks—those trading at a discount relative to their intrinsic worth—becomes particularly appealing, offering potential opportunities amidst broader market uncertainties.
Top 10 Undervalued Stocks Based On Cash Flows In The United Kingdom
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| Mitie Group (LSE:MTO) | £1.426 | £2.65 | 46.1% |
| Mincon Group (AIM:MCON) | £0.41 | £0.78 | 47.2% |
| Likewise Group (AIM:LIKE) | £0.28 | £0.53 | 46.9% |
| Kromek Group (AIM:KMK) | £0.049 | £0.090 | 45.8% |
| Hollywood Bowl Group (LSE:BOWL) | £2.46 | £4.79 | 48.6% |
| Gooch & Housego (AIM:GHH) | £5.44 | £10.79 | 49.6% |
| Gateley (Holdings) (AIM:GTLY) | £1.33 | £2.58 | 48.4% |
| Burberry Group (LSE:BRBY) | £11.725 | £21.46 | 45.4% |
| Begbies Traynor Group (AIM:BEG) | £1.18 | £2.22 | 46.9% |
| AstraZeneca (LSE:AZN) | £119.14 | £223.90 | 46.8% |
Let's review some notable picks from our screened stocks.
Begbies Traynor Group (AIM:BEG)
Overview: Begbies Traynor Group plc is a UK-based company offering business recovery, financial advisory, and property services consultancy, with a market cap of £187.86 million.
Operations: The company generates revenue from its business recovery and advisory segment, which accounts for £107.30 million, and its property advisory services, contributing £46.40 million.
Estimated Discount To Fair Value: 46.9%
Begbies Traynor Group appears undervalued, trading at £1.18, significantly below its estimated fair value of £2.22. Despite a recent 320% earnings growth and forecasted annual profit growth of 34.6%, the dividend yield of 3.64% isn't well covered by earnings due to large one-off items impacting results. Recent buybacks and a proposed dividend increase reflect management's confidence, while revenue guidance for FY26 suggests further growth potential within market expectations (£158.9M - £162.8M).
- According our earnings growth report, there's an indication that Begbies Traynor Group might be ready to expand.
- Delve into the full analysis health report here for a deeper understanding of Begbies Traynor Group.
Savills (LSE:SVS)
Overview: Savills plc, with a market cap of £1.25 billion, provides real estate services across the United Kingdom, Continental Europe, the Asia Pacific, Africa, North America, and the Middle East.
Operations: Savills generates revenue through four main segments: Consultancy (£534.90 million), Transaction Advisory (£877.30 million), Investment Management (£91.20 million), and Property and Facilities Management (£965.20 million).
Estimated Discount To Fair Value: 33.7%
Savills is trading at £9.21, considerably below its estimated fair value of £13.89, highlighting potential undervaluation based on cash flows. Despite a low forecasted return on equity and an unstable dividend track record, earnings are expected to grow significantly at 28.6% annually over the next three years, outpacing UK market growth rates. Recent earnings reports show modest increases in sales and net income for H1 2025 compared to the previous year.
- Upon reviewing our latest growth report, Savills' projected financial performance appears quite optimistic.
- Dive into the specifics of Savills here with our thorough financial health report.
Zegona Communications (LSE:ZEG)
Overview: Zegona Communications plc offers integrated telecommunications services in Spain, with a market cap of £9.11 billion.
Operations: The company generates revenue of €2.41 billion from its Internet Telephone segment in Spain.
Estimated Discount To Fair Value: 35.4%
Zegona Communications is trading at £12, significantly below its estimated fair value of £18.57, indicating potential undervaluation based on cash flows. The company is expected to become profitable within three years, with earnings forecasted to grow 64.43% annually. Recent debt refinancing reduced annual interest expenses and improved the capital structure by eliminating amortization and adopting a covenant-lite approach. However, Zegona reported a net loss of €438.81 million for the fifteen months ended March 31, 2025.
- Our expertly prepared growth report on Zegona Communications implies its future financial outlook may be stronger than recent results.
- Take a closer look at Zegona Communications' balance sheet health here in our report.
Taking Advantage
- Click here to access our complete index of 46 Undervalued UK Stocks Based On Cash Flows.
- Already own these companies? Bring clarity to your investment decisions by linking up your portfolio with Simply Wall St, where you can monitor all the vital signs of your stocks effortlessly.
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Seeking Other Investments?
- 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.
Valuation is complex, but we're here to simplify it.
Discover if Zegona Communications might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
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