This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Will Osborne's Recovery Stick? 3 Undervalued British Stocks

James Dennin, Kapitall: Growth in trade, investment, and spending boosted the UK economy, so we looked for undervalued British stocks. 

The United Kingdom's economy grew for a fourth straight quarter this year leading many analysts to declare George Osborne's recovery plan is well underway. The fact that most of the growth came from trade, which was Osborne's focus, seems to be another feather in the Chancellor of the Exchequer's cap. 

The UK economy still has liabilities. It is very connected to Europe where the recovery is more fragile. And with the pound trading high against the dollar (about 1 GBP to 1.60 USD) the robust exports which have spurred growth are fragile as well. 

[Read more from Kapitall: Will Drone Stocks Follow Rolls Royce into Shipping?]

That being said, trade and consumer sentiment are both up. More importantly, companies are also ramping up investment, which leads to more jobs. One of Osborne's chief initiatives, Project Merlin, was meant to help restore confidence in the financial sector. The agreement puts caps on bonus pay and requires that major institutions lend a certain amount to small businesses. 

If the British economy really is on firmer ground, it might present a good opportunity for investors who are looking to get leverage on the European equity market. We decided to look for undervalued stocks that are based in the UK.

To do that we decided to screen for stocks experiencing a mismatch between earnings-per-share and stock price. Rising earnings-per-share indicates the company is growing more profitable. Either their products are growing in value or the company is getting more efficient. Rising EPS and stagnant stock price suggests that the company is undervalued. 

We took all of the British stocks that trade on American exchanges and looked for ones experiencing an EPS/Price mismatch. Three companies made it through the screen.

​Click on the interactive chart below to view data over time. 

1.BHP Billiton plc ( BBL ):Operates as a diversified natural resources company. Market cap at $173.15B, most recent closing price at $65.08.

The EPS estimate for the company's current year increased from 4.92 to 5.35 over the last 30 days, an increase of 8.74%.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free


Chart of I:DJI
DOW 17,813.39 +1.20 0.01%
S&P 500 2,088.87 -0.27 -0.01%
NASDAQ 5,116.1430 +13.3350 0.26%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs