3 UK Stocks Possibly Trading Below Intrinsic Value Estimates

The UK stock market has recently faced headwinds, with the FTSE 100 index experiencing declines due to weak trade data from China, highlighting concerns over global economic recovery. In such a challenging environment, identifying stocks that may be trading below their intrinsic value can offer potential opportunities for investors seeking to navigate these turbulent times.

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

Name	Current Price	Fair Value (Est)	Discount (Est)
Gaming Realms (AIM:GMR)	£0.3665	£0.73	49.6%
Fevertree Drinks (AIM:FEVR)	£6.90	£12.80	46.1%
TBC Bank Group (LSE:TBCG)	£32.40	£63.18	48.7%
Victorian Plumbing Group (AIM:VIC)	£1.12	£2.06	45.6%
GlobalData (AIM:DATA)	£2.04	£3.72	45.2%
BATM Advanced Communications (LSE:BVC)	£0.193	£0.38	49.2%
Videndum (LSE:VID)	£2.50	£4.61	45.7%
Auction Technology Group (LSE:ATG)	£4.45	£8.19	45.6%
St. James's Place (LSE:STJ)	£8.48	£16.58	48.9%
Genel Energy (LSE:GENL)	£0.833	£1.56	46.4%

Click here to see the full list of 50 stocks from our Undervalued UK Stocks Based On Cash Flows screener.

Let's dive into some prime choices out of the screener.

GlobalData (AIM:DATA)

Overview: GlobalData Plc, along with its subsidiaries, offers business information through proprietary data, analytics, and insights across Europe, North America, and the Asia Pacific regions with a market cap of £1.63 billion.

Operations: The company's revenue segment comprises £276.80 million from its data, analytics, and insights services across Europe, North America, and the Asia Pacific.

Estimated Discount To Fair Value: 45.2%

GlobalData is trading at £2.04, significantly below its estimated fair value of £3.72, suggesting it may be undervalued based on cash flows. Analysts forecast earnings growth of 27.7% annually, outpacing the UK market's 14.6%, with revenue expected to grow faster than the market at 7.5% per year. Despite a dividend yield of 2.3% not being well-covered by earnings, no substantial insider selling has occurred recently, indicating potential confidence in future prospects.

• Insights from our recent growth report point to a promising forecast for GlobalData's business outlook.
• Take a closer look at GlobalData's balance sheet health here in our report.

WH Smith (LSE:SMWH)

Overview: WH Smith PLC is a retailer operating in the United Kingdom and internationally, with a market cap of £1.63 billion.

Operations: The company generates revenue from its High Street segment (£452 million) and Travel segments, which include Travel UK (£795 million), North America (£401 million), and Rest of the World (£270 million).

Estimated Discount To Fair Value: 23.5%

WH Smith, trading at £12.58, appears undervalued with a fair value estimate of £16.45, supported by robust cash flows and a share buyback program worth £25 million aimed at reducing share capital. Despite high debt levels and slower revenue growth forecasts of 5.4% annually compared to significant earnings growth expectations of 17.39%, the company maintains confidence through dividend increases and strategic financial maneuvers like buybacks to enhance shareholder value.

• Our earnings growth report unveils the potential for significant increases in WH Smith's future results.
• Navigate through the intricacies of WH Smith with our comprehensive financial health report here.

Supermarket Income REIT (LSE:SUPR)

Overview: Supermarket Income REIT plc (LSE: SUPR) is a real estate investment trust focused on investing in grocery properties across the UK, with a market cap of £873.61 million.

Operations: The company generates revenue of £107.23 million from its investment in grocery properties within the UK.

Estimated Discount To Fair Value: 24.1%

Supermarket Income REIT trades at £0.70, under its estimated fair value of £0.92, indicating potential undervaluation. Despite a net loss of £21.18 million for the year ending June 2024, down from £144.87 million previously, revenue grew to £107.23 million from £95.24 million year-on-year, with earnings projected to grow 48% annually and profitability expected within three years—faster than the UK market's average growth rate of 3.5%.

• The growth report we've compiled suggests that Supermarket Income REIT's future prospects could be on the up.
• Delve into the full analysis health report here for a deeper understanding of Supermarket Income REIT.

Summing It All Up

• Investigate our full lineup of 50 Undervalued UK Stocks Based On Cash Flows right here.
• Have a stake in these businesses? Integrate your holdings into Simply Wall St's portfolio for notifications and detailed stock reports.
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Searching for a Fresh Perspective?

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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.

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