Yahoo Finance 3 UK Stocks That Might Be Undervalued By Up To 49.8%
The London markets have recently experienced declines, with the FTSE 100 index closing lower due to weak trade data from China and a general dip in global economic confidence. Amid these challenging conditions, identifying undervalued stocks can be crucial for investors looking to capitalize on potential market inefficiencies.
Top 10 Undervalued Stocks Based On Cash Flows In The United Kingdom
Name | Current Price | Fair Value (Est) | Discount (Est) |
EnSilica (AIM:ENSI) | £0.435 | £0.82 | 47% |
Gaming Realms (AIM:GMR) | £0.41 | £0.77 | 46.8% |
GlobalData (AIM:DATA) | £2.17 | £4.33 | 49.8% |
Tracsis (AIM:TRCS) | £6.14 | £11.46 | 46.4% |
C&C Group (LSE:CCR) | £1.528 | £2.91 | 47.5% |
AstraZeneca (LSE:AZN) | £126.90 | £240.96 | 47.3% |
Sage Group (LSE:SGE) | £10.145 | £18.59 | 45.4% |
Mercia Asset Management (AIM:MERC) | £0.345 | £0.68 | 49% |
Tortilla Mexican Grill (AIM:MEX) | £0.55 | £1.01 | 45.4% |
Nexxen International (AIM:NEXN) | £2.73 | £5.42 | 49.6% |
Let's review some notable picks from our screened stocks.
GlobalData
Overview: GlobalData Plc, with a market cap of £1.75 billion, provides business information through proprietary data, analytics, and insights across Europe, North America, and the Asia Pacific.
Operations: The company's revenue segments include £276.80 million from data, analytics, and insights.
Estimated Discount To Fair Value: 49.8%
GlobalData Plc appears undervalued based on cash flows, trading at £2.17, significantly below the estimated fair value of £4.33. The company reported half-year sales of £139.6 million and net income of £20.1 million, both showing year-over-year growth. Earnings are forecast to grow 28.8% annually over the next three years, outpacing market expectations and suggesting robust future performance despite a dividend yield not well covered by earnings. Recent share buyback initiatives further indicate management's confidence in the company's valuation.
Nexxen International
Overview: Nexxen International Ltd. offers a comprehensive software platform facilitating advertiser-publisher connections, with a market cap of £373.91 million.
Operations: Nexxen International Ltd. generates $334.69 million from its Marketing Services segment.
Estimated Discount To Fair Value: 49.6%
Nexxen International is trading at £2.73, significantly below its estimated fair value of £5.42, indicating it may be undervalued based on cash flows. The company forecasts annual revenue growth of 7.8%, outpacing the UK market average of 3.6%. Despite a net loss of US$6.87 million in Q1 2024, this is an improvement from the previous year's US$17.91 million loss, and earnings are expected to grow 115% annually over the next three years as Nexxen becomes profitable by leveraging its new data platform and strategic partnerships like with Stagwell Marketing Cloud.
Smith & Nephew
Overview: Smith & Nephew plc, with a market cap of £10.28 billion, develops, manufactures, markets, and sells medical devices and services in the United Kingdom and internationally.
Operations: The company's revenue segments include Orthopaedics ($2.26 billion), Sports Medicine & ENT ($1.77 billion), and Advanced Wound Management (AWM) ($1.61 billion).
Estimated Discount To Fair Value: 34.6%
Smith & Nephew's recent earnings report showed a net income increase to US$214 million for H1 2024, up from US$172 million the previous year, with sales reaching US$2.83 billion. The company is trading at £11.8, significantly below its estimated fair value of £18.04, suggesting it is undervalued based on cash flows. Recent strategic partnerships and product approvals, like the RENASYS EDGE system and CATALYSTEM Primary Hip System, bolster future growth prospects amidst ongoing activist investor interest from Cevian Capital.
Our growth report here indicates Smith & Nephew may be poised for an improving outlook.
Dive into the specifics of Smith & Nephew here with our thorough financial health report.
Next Steps
Delve into our full catalog of 51 Undervalued UK Stocks Based On Cash Flows here.
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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.
Companies discussed in this article include AIM:DATA AIM:NEXN and LSE:SN..
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