The United Kingdom's FTSE 100 index has recently faced challenges, closing lower amid weak trade data from China and global economic uncertainties. Despite these headwinds, investors can find opportunities in stocks that are estimated to be trading below their fair value, offering potential for growth as market conditions stabilize.

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) £30.60 £59.05 48.2% Gaming Realms (AIM:GMR) £0.39 £0.77 49% Liontrust Asset Management (LSE:LIO) £6.49 £12.29 47.2% Marks Electrical Group (AIM:MRK) £0.65 £1.27 48.9% C&C Group (LSE:CCR) £1.54 £3.00 48.7% AstraZeneca (LSE:AZN) £130.50 £252.34 48.3% Mercia Asset Management (AIM:MERC) £0.35 £0.68 48.2% Franchise Brands (AIM:FRAN) £1.805 £3.61 50% Tortilla Mexican Grill (AIM:MEX) £0.52 £1.01 48.4% Forterra (LSE:FORT) £1.764 £3.52 49.9%

Click here to see the full list of 58 stocks from our Undervalued UK Stocks Based On Cash Flows screener.

Let's take a closer look at a couple of our picks from the screened companies.

Bridgepoint Group

Overview: Bridgepoint Group plc is a private equity and private credit firm specializing in various investment strategies including middle market, small mid cap, small cap, growth capital, buyouts, syndicate debt, direct lending and credit opportunities with a market cap of £2.40 billion.

Operations: Revenue from Bridgepoint Group plc's segments is comprised of £285.60 million from Private Equity and £74.50 million from Private Credit.

Estimated Discount To Fair Value: 20.4%

Bridgepoint Group is trading 20.4% below its estimated fair value of £3.81, making it an attractive option for undervalued stocks based on cash flows. Despite a decline in profit margins to 19.2%, earnings are forecast to grow significantly at 33.17% annually over the next three years, outpacing the UK market's growth rate of 14.3%. Recent M&A rumors and share buybacks further highlight the company's proactive financial strategies amidst evolving market conditions.

Insights from our recent growth report point to a promising forecast for Bridgepoint Group's business outlook. Navigate through the intricacies of Bridgepoint Group with our comprehensive financial health report here. LSE:BPT Discounted Cash Flow as at Aug 2024

NCC Group

Overview: NCC Group plc operates in the cyber and software resilience sector across the United Kingdom, Asia-Pacific, North America, and Europe with a market cap of £496.40 million.

Operations: The company's revenue segments include £258.50 million from Cyber Security and £65.90 million from Escode.

Estimated Discount To Fair Value: 40.6%



NCC Group is trading at £1.59, significantly below its estimated fair value of £2.67, indicating it may be undervalued based on cash flows. Despite reporting a net loss of £24.9 million for the year ending May 31, 2024, NCC's earnings are forecast to grow 87.12% annually over the next three years as it becomes profitable again. The company’s revenue growth rate of 4.5% per year is slightly above the UK market average of 3.7%.

Our growth report here indicates NCC Group may be poised for an improving outlook. Take a closer look at NCC Group's balance sheet health here in our report. LSE:NCC Discounted Cash Flow as at Aug 2024

Savills

Overview: Savills plc, with a market cap of £1.61 billion, provides real estate services across the United Kingdom, Continental Europe, the Asia Pacific, Africa, North America and the Middle East through its subsidiaries.

Operations: Savills generates revenue through four main segments: Consultancy (£464.80 million), Transaction Advisory (£803.60 million), Investment Management (£100.50 million), and Property and Facilities Management (£920.90 million).

Estimated Discount To Fair Value: 22.8%

Savills is trading at £11.92, below its estimated fair value of £15.44, suggesting it is undervalued based on cash flows. Recent earnings for H1 2024 show net income increased to £8.3 million from £4.8 million a year ago, with basic earnings per share rising to 6.1 pence from 3.5 pence. The company also announced an interim dividend increase and secured a significant advisory role with Places for London, enhancing its growth prospects further.

Our earnings growth report unveils the potential for significant increases in Savills' future results. Delve into the full analysis health report here for a deeper understanding of Savills. LSE:SVS Discounted Cash Flow as at Aug 2024

Make It Happen

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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 LSE:BPT LSE:NCC and LSE:SVS.

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