UK shares in the FTSE 100 have been making a rapid recovery in recent weeks since the early April market sell-off. But not all British stocks have been holding up so well. There’s quite a wide range of London-listed companies now trading near their 52-week low at valuations which, on the surface, are starting to look dirt cheap.
For example, three that have caught my attention this month are Videndum (LSE:VID), Severfield (LSE:SFR), and Ultimate Products (LSE:ULTP).
Huge tumbles
In terms of business models, all three of these UK shares are quite different from each other. Videndum specialises in hardware and software solutions for content creators, Severfield’s focused on creating structural steelworks, while Ultimate Products sells a branded portfolio of homeware products.
However, one common characteristic all these companies currently share is that their stock prices are in the gutter. And as a result, the forward price-to-earnings ratios are now looking quite attractive from a value investor perspective. So are these buying opportunities or value traps?
| Company | 12-Month Share Price Performance | Forward Price-to-Earnings Ratio |
| Videndum | -74% | 9.3 |
| Severfield | -66% | 2.2 |
| Ultimate Products | -64% | 5.1 |
What went wrong?
Before jumping headfirst into a new value investment, it’s important to understand what’s driving the stock price down. Looking at these enterprises, there are a few factors at play.
However, the primary catalyst for each appears to be:
- A slower-than-expected rebound in the scripted TV markets following last year’s strikes has caused Videndum’s revenue to underperform, translating into profit warnings for shareholders
- Disruption within the construction industry has caused a number of Severfield’s key projects to be delayed or outright cancelled, with seemingly no sign of improvement on the horizon
- A combination of weaker UK consumer spending paired with retailer inventory destocking headwinds has caused demand for Ultimate Product’s offer to suffer while shipping costs continue to rise
There seems to be a common theme here. All three businesses are experiencing a cyclical downturn of some sort. But buying during a downcycle can potentially be lucrative if the firms are able to bounce back.
Time to buy?
Not all of these UK shares, even at their seemingly cheap valuations today, are tempting me to buy right now.
Severfield’s the cheapest, according to the forward earnings multiple. But these projected earnings for 2026 include profits for projects that should have materialised in 2025. And with construction headwinds looking unlikely to turn any time soon, the group’s downward journey might not yet be over.
Videndum seems to be in a better spot, cyclically speaking, as the film & TV industry’s recovering at a faster pace compared to the construction sector. Butthe co mpany’s also tackling debt and liquidity issues that management’s in the process of renegotiating.
As for Ultimate Products, the firm appears to offer a stronger financial offer with operational cash flow more than able to cover interest expenses and dividends to shareholders. Operating in a highly competitive industry does give me pause. However, its leading brands, such as Russell Hobbs, Salter, and Dreamtime, definitely give it a competitive edge.
With that in mind, value investors looking for cheap UK shares today might want to investigate Ultimate Products a bit more deeply.
