Moonpig Group And 2 Other Stocks On The UK Exchange That Could Be Trading Below Intrinsic Value

The London market has recently faced headwinds, with the FTSE 100 closing lower due to weak trade data from China and concerns about the global economic recovery. Despite these challenges, opportunities may exist for investors in undervalued stocks that are trading below their intrinsic value.

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

Name	Current Price	Fair Value (Est)	Discount (Est)
TBC Bank Group (LSE:TBCG)	£30.85	£59.60	48.2%
Integrated Diagnostics Holdings (LSE:IDHC)	US$0.37	US$0.72	48.8%
Tracsis (AIM:TRCS)	£5.85	£11.42	48.8%
Liontrust Asset Management (LSE:LIO)	£6.46	£12.32	47.5%
AstraZeneca (LSE:AZN)	£131.66	£254.98	48.4%
C&C Group (LSE:CCR)	£1.564	£3.01	48.1%
Mercia Asset Management (AIM:MERC)	£0.348	£0.68	48.6%
Tortilla Mexican Grill (AIM:MEX)	£0.52	£1.01	48.4%
SysGroup (AIM:SYS)	£0.335	£0.66	49.3%
Nexxen International (AIM:NEXN)	£2.81	£5.39	47.9%

Click here to see the full list of 56 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.

Moonpig Group (LSE:MOON)

Overview: Moonpig Group PLC, with a market cap of £744.81 million, operates in the Netherlands and the United Kingdom offering online greeting cards and gifts.

Operations: The company generates revenue from three main segments: Greetz (£51.24 million), Moonpig (£241.33 million), and Experiences (£48.58 million).

Estimated Discount To Fair Value: 41.6%

Moonpig Group is currently trading at £2.16, significantly below its estimated fair value of £3.7, indicating it may be undervalued based on cash flows. The company reported strong financial results with sales of £341.14 million and net income of £34.17 million for the year ended April 30, 2024. Earnings are forecast to grow by 16.8% annually, outpacing the UK market's growth rate of 14.3%. Despite high debt levels and recent insider selling, Moonpig's consistent cash generation and plans for strategic M&A highlight its potential for future value creation.

• The growth report we've compiled suggests that Moonpig Group's future prospects could be on the up.
• Get an in-depth perspective on Moonpig Group's balance sheet by reading our health report here.

Renewi (LSE:RWI)

Overview: Renewi plc, with a market cap of £541.36 million, operates in the collection, sorting, and processing of waste to create secondary materials across the Netherlands, Belgium, the United Kingdom, France, Portugal and internationally.

Operations: Renewi plc generates revenue from several segments, including Specialities (€175.20 million), Mineralz & Water (€181.60 million), Belgium Commercial Waste (€476.20 million), and Netherlands Commercial Waste (€911.50 million).

Estimated Discount To Fair Value: 14.6%

Renewi is trading at £6.72, below its estimated fair value of £7.87, reflecting potential undervaluation based on cash flows. Despite a high debt level and declining profit margins (2.5% vs 4.8% last year), earnings are forecast to grow significantly at 21.15% annually over the next three years, outpacing the UK market's growth rate of 14.3%. Recent strategic alliances aim to enhance recycling capabilities, potentially bolstering future financial performance and sustainability efforts.

• Our comprehensive growth report raises the possibility that Renewi is poised for substantial financial growth.
• Take a closer look at Renewi's balance sheet health here in our report.

Sage Group (LSE:SGE)

Overview: The Sage Group plc, with a market cap of £10.32 billion, provides technology solutions and services for small and medium businesses in the United States, the United Kingdom, France, and internationally.

Operations: The company's revenue segments are as follows: £595 million from Europe, £1.01 billion from North America, and £488 million from the United Kingdom & Ireland.

Estimated Discount To Fair Value: 10.7%

Sage Group is trading at £10.33, below its estimated fair value of £11.56, indicating potential undervaluation based on cash flows. Recent revenue growth of 9% in Q3 2024 and a strategic partnership with VoPay to enhance Sage Business Cloud Payroll highlight operational improvements. However, the company carries a high level of debt, and while earnings are forecast to grow at 14.38% annually, this is not considered significant growth.

• Our expertly prepared growth report on Sage Group implies its future financial outlook may be stronger than recent results.
• Unlock comprehensive insights into our analysis of Sage Group stock in this financial health report.

Key Takeaways

• Navigate through the entire inventory of 56 Undervalued UK Stocks Based On Cash Flows here.
• Are these companies part of your investment strategy? Use Simply Wall St to consolidate your holdings into a portfolio and gain insights with our comprehensive analysis tools.
• Invest smarter with the free Simply Wall St app providing detailed insights into every stock market around the globe.

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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