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11 Best Undervalued UK Stocks To Buy Now

In this piece, we will take a look at the 11 best undervalued U.K. stocks to buy now. If you want to skip our overview of the British economy, then take a look at 5 Best Undervalued UK Stocks To Buy Now.

The U.K. is one of the biggest economies in the world and a country that has been perhaps one of the most consequential of our modern day age. Today’s global political order and the economy are influenced by technological advancements that trace their roots back to the U.K., and over the course of the years, while the country’s geographic footprint has decreased, it still plays a crucial role in the global world order.

Yet, the U.K. of today is far different from the U.K. of the early 20th century. The aftermath of the second world war saw the British Empire give up all of its prized territorial possessions in the world, and focus its attention on becoming a global financial hub. This economic model relies on global capital flows inside Britain and its territories, and the British economy is also built on this model. It makes the country reliant on high exports and foreign direct investment (FDI) to attract foreign capital, leaving it vulnerable in a slow global economic environment. This is because if there is high global inflation and overall belt tightening – like what we’re facing today – then capital flows to Britain decline and place strain on either its bond market or the Pound.

Additionally, unlike the U.S. which produces vast amounts of gas and oil, Britain relies extensively on imports. As a result, its inflation is more sensitive to fluctuations in the global energy supply chains. The combination of all these factors has led to a slow British economic performance since the coronavirus pandemic as well as the aftermath of the 2022 Russian invasion of Ukraine. Inflation in Britain was one of the highest in the developed world in October 2022 as prices soared by 11%. This rapid increase came alongside a crash in the value of the Pound which had already been struggling since the British decision to leave the European Union.

Just like Germany, these external shocks have done lasting damage to the U.K. economy and as a result, the future outlook is rather tepid. According to estimates by the International Monetary Fund (IMF), the British economy is slated to grow at a rather paltry 0.4% in 2023 and accelerate to a modest 1% in 2024. As a contrast, consider the growth of the economic beast that is the U.S. Despite fighting rapid interest rate hikes by the Federal Reserve and high inflation, American GDP growth stood at 4.9% in the third quarter of 2023, beating forecasts of a recession and creating worries that the Federal Reserve can raise interest rates even further. The British economy, on the other hand, had grown at 7.1% in 2021.

The post Brexit era has been particularly hard on the U.K. when attracting foreign capital flows. Data compiled by the World Bank shows that in 2021, the first full year after Brexit, net inflows in the U.K. stood at $5.92 billion. However, Brexit, which was finalized in 2016 after a referendum, also hampered global FDI flows to Britain significantly in the year after 2016. The World Bank data shows that in 2016, the year of the referendum, inflows in the U.K. stood at a whopping $324 billion, and by 2018 this had dropped to a multi-decade low of a negative $25 billion. This means that the amount of money that flowed into Britain was lower than the amount that went out through grants or other areas.

The fallout from Brexit, which is one of the biggest sources of political divide in the U.K. between the ruling Conservative Party and their rival, Labor, has also spurred the ruling party into action. Current British Prime Minister Rishi Sunak who took over the reins after the collapse of the Truss government last year, has proposed a set of reforms called the Edinburgh Reforms. These are aimed at restoring London’s global competitiveness as a financial hub, since the post Brexit world makes it compete with other lucrative markets such as Amsterdam, Singapore, and New York. Broadly speaking, these new rules aim to relax some capital requirements for banks and remove individual employee scrutiny for banks and insurance companies.

Finally, before we take a look at the top undervalued U.K. stocks to buy, an overview of the British stock market and the current economic climate is necessary. Britain’s flagship stock index, the FTSE 100, is down 2% year to date after multiple rallies. The latest rally came in November after the Bank of England’s decision to keep interest rates unchanged. Markets greeted the news optimistically, and shares of companies that are sensitive to interest rate hikes rallied to enable the FTSE 100 to gain 1.4%. The strain from high interest rates is evident on the British economy as home builder Persimmon Plc (LON:PSN.L) warned about an uncertain environment in 2024 during its Q3 2023 trading statement.

With these details in mind, let’s take a look at some undervalued UK stocks to buy with the notable picks being CNH Industrial N.V. (NYSE:CNHI), Roivant Sciences Ltd. (NASDAQ:ROIV), and Genius Sports Limited (NYSE:GENI).

IR Stone/Shutterstock.com

Our Methodology

To compile our list of the best undervalued stocks we first compiled a list of 30 U.K. stocks with the greatest share price upside according to average analyst share price targets. Then, they were ranked based on this upside, and the top 20 stocks were chosen. These were re-ranked based on the number of hedge funds that had bought their shares during Q2 2023, and the best undervalued U.K. stocks to buy are as follows.

Best Undervalued UK Stocks To Buy Now

11. IHS Holding Limited (NYSE:IHS)

Latest Share Price Upside: 131%

Number of Hedge Fund Investors In Q2 2023: 15

IHS Holding Limited (NYSE:IHS) is a backend telecommunications company that builds infrastructure in several different countries. Its shares are rated Strong Buy on average and analysts have set an average share price target of $12.64.

During this year’s second quarter, 15 out of the 910 hedge funds part of Insider Monkey’s research had held a stake in IHS Holding Limited (NYSE:IHS). It Roivant Sciences Ltd. (NASDAQ:ROIV), joins CNH Industrial N.V. (NYSE:CNHI), and Genius Sports Limited (NYSE:GENI) in our list of the best undervalued UK stocks to buy.

10. Paysafe Limited (NYSE:PSFE)

Latest Share Price Upside: 138%

Number of Hedge Fund Investors In Q2 2023: 17

Paysafe Limited (NYSE:PSFE) is a financial software company that enables users to digitally make payments. A soft British economy has created problems for the firm on the financial front since it has missed analyst EPS estimates in all four of its latest quarters.

Out of the 910 hedge funds tracked by Insider Monkey, 17 had invested in the firm as of June 2023. Ken Griffin’s Citadel Investment Group is Paysafe Limited (NYSE:PSFE)’s biggest investor out of these since it owns 850,396 shares that are worth $8.5 million.

9. NovoCure Limited (NASDAQ:NVCR)

Latest Share Price Upside: 369%

Number of Hedge Fund Investors In Q2 2023: 20

NovoCure Limited (NASDAQ:NVCR) is a healthcare company that develops devices for cancer treatments. It reported its third quarter earnings in late October, and the results saw NovoCure Limited (NASDAQ:NVCR)’s revenue drop by 3% annually even though its prescriptions jumped by 6%.

During 2023’s June quarter, 20 out of the 910 hedge funds polled by Insider Monkey had bought and owned a stake in NovoCure Limited (NASDAQ:NVCR). Philippe Laffont’s Coatue Management owns the largest stake among these which is worth $36.7 million.

8. Burford Capital Limited (NYSE:BUR)

Latest Share Price Upside: 45%

Number of Hedge Fund Investors In Q2 2023: 22

Burford Capital Limited (NYSE:BUR) is a financial firm that focuses on meeting the needs of the legal industry. More than 60% of its stock is owned by institutional investors, which can lead to stability during turbulent times but requires watching the stock for sudden dips.

Insider Monkey scoured through 910 hedge funds for their investments during this year’s second quarter and found 22 Burford Capital Limited (NYSE:BUR) investors. Out of these, the biggest shareholder is William B. Gray’s Orbis Investment Management since it owns $53.8 million worth of shares.

7. Verona Pharma plc (NASDAQ:VRNA)

Latest Share Price Upside: 135%

Number of Hedge Fund Investors In Q2 2023: 22

Verona Pharma plc (NASDAQ:VRNA) is a small drug company developing treatments for respiratory ailments. Inflation and a slowing economy has made its operating environment difficult, as while its cash position increased to $257 million in Q2 2023, its R&D dropped to $3 million while operating expenses soared by 152% on the back of an upcoming product launch.

As of June 2023, 22 out of the 910 hedge funds part of Insider Monkey’s survey had invested in the firm. Verona Pharma plc (NASDAQ:VRNA)’s largest hedge fund shareholder is Peter Kolchinsky’s RA Capital Management courtesy of its $133 million investment.

6. Immunocore Holdings plc (NASDAQ:IMCR)

Latest Share Price Upside: 57%

Number of Hedge Fund Investors In Q2 2023: 23

Immunocore Holdings plc (NASDAQ:IMCR) is a biotechnology company with several cancer treatment drugs in clinical trials. It reported its third quarter earnings in November 2023, which saw revenue jump by more than $10 million annually on the back of strong product sales.

23 out of the 910 hedge funds part of Insider Monkey’s Q2 2023 database had held a stake in Immunocore Holdings plc (NASDAQ:IMCR). Kris Jenner, Gordon Bussard, Graham Mcphail’s Rock Springs Capital Management owns the biggest stake out of these which is worth $181 million and comes via 3 million shares.

CNH Industrial N.V. (NYSE:CNHI), Immunocore Holdings plc (NASDAQ:IMCR), Roivant Sciences Ltd. (NASDAQ:ROIV), and Genius Sports Limited (NYSE:GENI) are some top undervalued UK stocks to buy.

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Disclosure: None. 11 Best Undervalued UK Stocks To Buy Now is originally published on Insider Monkey.

AI, Tariffs, Nuclear Power: One Undervalued Stock Connects ALL the Dots (Before It Explodes!)

Artificial intelligence is the greatest investment opportunity of our lifetime. The time to invest in groundbreaking AI is now, and this stock is a steal!

AI is eating the world—and the machines behind it are ravenous.

Each ChatGPT query, each model update, each robotic breakthrough consumes massive amounts of energy. In fact, AI is already pushing global power grids to the brink.

Wall Street is pouring hundreds of billions into artificial intelligence—training smarter chatbots, automating industries, and building the digital future. But there’s one urgent question few are asking:

Where will all of that energy come from?

AI is the most electricity-hungry technology ever invented. Each data center powering large language models like ChatGPT consumes as much energy as a small city. And it’s about to get worse.

Even Sam Altman, the founder of OpenAI, issued a stark warning:

“The future of AI depends on an energy breakthrough.”

Elon Musk was even more blunt:

“AI will run out of electricity by next year.”

As the world chases faster, smarter machines, a hidden crisis is emerging behind the scenes. Power grids are strained. Electricity prices are rising. Utilities are scrambling to expand capacity.

And that’s where the real opportunity lies…

One little-known company—almost entirely overlooked by most AI investors—could be the ultimate backdoor play. It’s not a chipmaker. It’s not a cloud platform. But it might be the most important AI stock in the US owns critical energy infrastructure assets positioned to feed the coming AI energy spike.

As demand from AI data centers explodes, this company is gearing up to profit from the most valuable commodity in the digital age: electricity.

The “Toll Booth” Operator of the AI Energy Boom

  • It owns critical nuclear energy infrastructure assets, positioning it at the heart of America’s next-generation power strategy.
  • It’s one of the only global companies capable of executing large-scale, complex EPC (engineering, procurement, and construction) projects across oil, gas, renewable fuels, and industrial infrastructure.
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Trump has made it clear: Europe and U.S. allies must buy American LNG.

And our company sits in the toll booth—collecting fees on every drop exported.

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As Trump’s proposed tariffs push American manufacturers to bring their operations back home, this company will be first in line to rebuild, retrofit, and reengineer those facilities.

AI. Energy. Tariffs. Onshoring. This One Company Ties It All Together.

While the world is distracted by flashy AI tickers, a few smart investors are quietly scooping up shares of the one company powering it all from behind the scenes.

AI needs energy. Energy needs infrastructure.

And infrastructure needs a builder with experience, scale, and execution.

This company has its finger in every pie—and Wall Street is just starting to notice.

Wall Street is noticing this company also because it is quietly riding all of these tailwinds—without the sky-high valuation.

While most energy and utility firms are buried under mountains of debt and coughing up hefty interest payments just to appease bondholders…

This company is completely debt-free.

In fact, it’s sitting on a war chest of cash—equal to nearly one-third of its entire market cap.

It also owns a huge equity stake in another red-hot AI play, giving investors indirect exposure to multiple AI growth engines without paying a premium.

And here’s what the smart money has started whispering…

The Hedge Fund Secret That’s Starting to Leak Out

This stock is so off-the-radar, so absurdly undervalued, that some of the most secretive hedge fund managers in the world have begun pitching it at closed-door investment summits.

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Why? Because excluding cash and investments, this company is trading at less than 7 times earnings.

And that’s for a business tied to:

  • The AI infrastructure supercycle
  • The onshoring boom driven by Trump-era tariffs
  • A surge in U.S. LNG exports
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You simply won’t find another AI and energy stock this cheap… with this much upside.

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Disruption is the New Name of the Game: Let’s face it, complacency breeds stagnation.

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A New Dawn is Coming to U.S. Stocks

I work for one of the largest independent financial publishers in the world – representing over 1 million people in 148 countries.

We’re independently funding today’s broadcast to address something on the mind of every investor in America right now…

Should I put my money in Artificial Intelligence?

Here to answer that for us… and give away his No. 1 free AI recommendation… is 50-year Wall Street titan, Marc Chaikin.

Marc’s been a trader, stockbroker, and analyst. He was the head of the options department at a major brokerage firm and is a sought-after expert for CNBC, Fox Business, Barron’s, and Yahoo! Finance…

But what Marc’s most known for is his award-winning stock-rating system. Which determines whether a stock could shoot sky-high in the next three to six months… or come crashing down.

That’s why Marc’s work appears in every Bloomberg and Reuters terminal on the planet…

And is still used by hundreds of banks, hedge funds, and brokerages to track the billions of dollars flowing in and out of stocks each day.

He’s used this system to survive nine bear markets… create three new indices for the Nasdaq… and even predict the brutal bear market of 2022, 90 days in advance.

Click to continue reading…