Here are three UK-listed shares currently sitting near their historic lows. Are they worth a closer look?

Tullow Oil

Tullow Oil (LSE: TLW) has had a rough few years, but it’s not out of the game yet. The Africa-focused driller recently appointed a new chief executive, signalling a fresh start for the business. It also strengthened its balance sheet by $120m through the sale of its Kenyan assets and secured an extended licence in Ghana to 2040 — a key long-term boost.

However, production from its flagship Jubilee field slipped 32.8% to 11m barrels this year, largely due to maintenance shutdowns between March and April. That’s been reflected in its share price, which trades at just 10.2p – not far above its 7.16p low.

On paper, Tullow looks astonishingly cheap, with a forward price-to-earnings (P/E) ratio of only 2.42. But the low valuation comes with good reason. After a profitable 2024, it’s slipped back into the red, with just £141m in cash compared with £1.81bn in debt. Forecasts suggest little improvement in revenue or earnings for several years.

While I think risk-tolerant investors could consider it for a speculative turnaround play, its heavy debt and inconsistent profitability could still make it a tricky stock to hold long term.

Mobico Group

Mobico Group (LSE: MCG), the owner of National Express, is another name trading close to rock bottom. The transport operator’s shares have fallen around 90% in the past decade and currently sit at 27.82p — just above their 24.3p low.

Despite reporting £3bn in revenue, Mobico’s earnings collapsed by 610% year on year, resulting in an £824m loss. Its £3bn in assets and £1.48bn in debt highlight a stretched balance sheet.

Still, the company recently won a promising eight-year, €500m transport contract in Saudi Arabia.

The forward P/E ratio of 3.9 looks tempting, but unless profitability returns soon, that discount may not matter. Persistent losses, high debt and inflation-linked cost pressures make this one a value share that’s probably a bit risky to consider right now.

Synthomer

Synthomer (LSE: SYNT), a chemicals producer, might be the most interesting of the three. Trading at 59.6p, its barely above its 56.6p low having recently lost £72.6m despite generating £1.96bn in revenue.

Surprisingly, its balance sheet remains relatively sound, with assets outweighing liabilities and debt comfortably covered by equity.

Out of seven analysts tracking the company, the average 12-month price target is 111p — an 86% premium to today’s price. Earnings are forecast to rebound next year to 6p per share, which could signal a turnaround if demand for its speciality polymers picks up.

The main risk is that recovery may take longer than expected, particularly if industrial demand stays weak in Europe.

Still, I think it’s one of the more promising value shares to consider on the FTSE 250 right now.

The bottom line?

Value investing often requires patience and strong nerves. While these stocks are all trading near their lows, only a clear path to profitability will determine whether they become genuine bargains — or stay stuck in the bargain bin.

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So is there a potentially hidden buying opportunity here?

What’s going on with Videndum?

As a quick crash course, Videndum specialises in designing and manufacturing specialist hardware and software for broadcasters, film studios, and content creators. This includes camera rigs, LED lighting, and audio solutions, among others.

It’s a bit of a niche segment that’s been disrupted in recent years following the pandemic and project delays created by the shifting economics of the film industry. Sadly, in 2025, the situation continues to be tough. Demand remains relatively weak with revenues sliding in its interim results by 25% with the bottom line falling further into the red, year on year.

US tariffs have only compounded the headaches, with distributors hitting the pause on new orders. And while management did raise some cash through equity, the group’s balance sheet isn’t in a terrific state.

That certainly explains why the stock’s taken such an extreme tumble. But what about a potential recovery?

Despite the challenges, Videndum’s successfully started unlocking meaningful annual savings with a target of £15m by the end of 2025. At the same time, the group’s debt covenant reset in April has provided some wiggle room to start mending the balance sheet while also launching new products.

If these de-risking efforts are a success and North American orders begin to normalise, there could be a viable path to recovery moving forward.

And Mobico?

Mobico’s probably better known by its original name – National Express. And the bus, coach, and rail services operator has also had a tough time of late. Unlike Videndum, revenues are still moving in the right direction. But sadly, that hasn’t stopped net earnings from being elusive.

Admittedly, a large chunk of its losses are non-cash impairment charges, mostly linked to its North American School Bus business. This segment has long proven problematic, and management’s in the process of selling it off using the proceeds to pay down debt.

This is likely the wisest move. After all, Fitch – the credit rating agency – recently downgraded Mobico to a BB+ rating. That’s just below the threshold of investment-grade bonds and implies that any future borrowing activity will come with significantly higher interest rate payments.

The asset sale is expected to reduce the group’s gearing from 3.0 to 2.5. That’s still pretty high, but a lot more manageable. And with passenger demand elsewhere in the business remaining strong, along with upcoming price adjustments, management’s guidance suggests improvements in underlying operating income in the second half of 2025 – potentially signalling the start of a recovery.

The bottom line

Both Videndum and Mobico will need flawless execution to deliver on a strong rebound. Given their recent track records, that’s quite a big ask. As such, I don’t think investors should be considering these as top shares to buy right now.

However, if both businesses can demonstrate more progress towards recovery, then it might be worth taking a closer look. For now, I’m looking at other investing opportunities.

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But this reaction can also be overblown. And the result is a buying opportunity that smarter investors can exploit.

We’ve already seen the power of a comeback story with Rolls-Royce. The engineering giant has surged more than 1,700% in the last five years after being one of the worst-performing UK stocks in 2020.

Skip ahead to 2025, and Mobico Group (LSE:MCG) now finds itself on the list of worst performers, falling by 60% over the last 12 months. What happened? And is this secretly the start of a rebound?

Digging deeper

As a quick crash course, Mobico is the recently rebranded name of National Express – a public transport operator with a fleet of over 13,500 vehicles. While the business certainly has the advantage of scale on its side, it’s nonetheless encountered a series of challenges over the last year, which has cause the stock to tumble.

High levels of competition within North America, alongside operational issues and non-cash impairment charges, have resulted in earnings taking a substantial beating. The situation‘s only been made worse by the group’s high level of debt and leverage, resulting in a growing level of market scepticism. And that’s even after management maintained its full-year profit guidance despite all the difficulties.

Combined, these factors are responsible for the downfall of Mobico’s market-cap. But with the damage now done, could investors be looking at an entry point for a potential recovery investment?

Bull versus bear

To management’s credit, the firm’s been successful in securing new contracts that support future revenue growth, particularly in its core UK and Spanish regions. At the same time, the group’s sold off its struggling North American school bus enterprise, improving liquidity and providing some much-needed flexibility to deleverage the balance sheet.

Pairing all this with a continued push for better operational efficiency, expansion opportunities with German railways, and the positive secular demand for sustainable public transport, there is a valid bull case to be made. Even more so, considering the shares now trade at a seemingly dirt cheap forward price-to-earnings ratio of 5.1.

Having said that, it’s also important to recognise the risks that still surround this business. The threat of margin compression from competitive forces still remains a significant obstacle. And while management’s making strides to lower debt levels, such moves also limit the capacity for internal growth investments, potentially enabling better-funded rivals to outmanoeuvre Mobico while it tries to deliver on its turnaround.

The bottom line

All things considered, the Mobico share price appears to have the potential to deliver an impressive recovery. However, that’s far from guaranteed. Management’s still in the early stages of mending the cracks, and with competitors storming ahead, there remains the possibility of Mobico being left behind.

With that in mind, I’m not tempted to buy any shares today. Instead, I’m looking elsewhere in my hunt for the best stocks to buy in 2025.

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Yet despite it having such wide awareness and a strong market position, the coach line’s parent, Mobico (LSE: MCG) is sitting firmly on the hard shoulder with its hazard lights flashing. Over the past five years, Mobico has tumbled 85% in price and now stands in value share territory, in my view.

That is not the sort of price movement any shareholder wants to see. Then again, given that the business has some underlying strength, could this be an opportunity for me to pick up a long-term bargain for my portfolio on the cheap?

Mixed performance signals

Last year showed some solid performance from the company, in my view.

For example, revenues showed year-on-year growth of 12.2%, hitting £3.2bn. Free cash flow improved slightly, to £164m. Although there was a post-tax loss of £163m, that was still progress in the right direction after the prior year’s £231m.

But there are red flags too.

Covenant net debt remains a concern, at £987m (that compares to a current market capitalisation of £385m). That was more or less the same as the prior year, though, so at least the balance sheet did not get even worse in that regard.

Meanwhile, the dividend fell two-thirds but still came in at 1.7p per share. That implies a current dividend yield of 2.7%.

In a trading update last month, the company said revenues in the first quarter grew 3.5% year on year. It expects adjusted operating profit this year of £185m–£205m, which would be an improvement on last year’s £169m.

Classic value share situation?

To me, this looks like a classic situation of a value share offering what seems like a possible bargain.

The company has advantages including strong positions in multiple transport markets (it runs trains as well as coaches and operates in non-UK markets including Spain, Germany, and the US). It has strong and growing revenues, is cash generative, and can benefit from ongoing demand for public transport.

Yes there are risks, such as chronic problems with German rail efficiency (really!) leading to lower passenger numbers there.

The big question

But for me, the key question here is not about the sorts of risks seen in the ordinary course of business.

Rather, my concern is the existential risk of whether Mobico can ultimately survive. A share does not fall 85% in five years without reason.

Specifically, the debt situation looks very troubling to me. The company expects to pay £85m–£90m in net interest this year, up from £75m last year.

Given its debt, the company’s interest costs are high even without considering how it can repay the capital amounts on its loans. An obvious move would be to cancel the dividend altogether. Last year’s cut moves a long way in that direction.

Even doing that, though, would not necessarily resolve the fact that Mobico is saddled with a lot of debt. That could mean what appears to be a value share turns out to be a value trap. I am not buying.

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A struggling company

I came across Mobico Group (LSE: MCG) earlier this year, when the share price took a sharp move lower. The trend hasn’t changed since then, with the stock down a whopping 60% over the past year.

The company was formerly known as National Express group. It operates bus, train and coach services around the UK. With Covid-19 support ending and high inflation impacting wage costs, the business hasn’t performed well in 2023.

In the half-year report, Mobico reported a loss after tax of £39.4m. This compares to a profit in H1 2022 of £15.2m.

Despite this fall, the company has still paid out income in the form of dividends over this time period. The dividend from the 2022 full-year results was paid in May at 5p per share. An interim dividend of 1.7p was also paid back in September.

Looking ahead

At the moment, analysts are projecting a fall in the dividend next year. This is likely comprised of a payment of 3.4p in May 2024, followed by 1.8p in the autumn. For 2025, there’s an expectation of 3.6p and 1.9p.

If we assume the share price remains the same, then the dividend yield is likely to fall from the current level of 9.85%. With a total dividend per share of 5.2p, it could fall to 7.65% in 2024, but rise to 8.08% in 2025.

This is a generous yield, one of the highest in the FTSE 250. Even with the recent problems, the company has a strong hold on the transport networks. It has a good list of pipeline opportunities (27 new contracts versus 16 in 2022). Further, it has high levels of retention from clients, such as 98% in School Bus services.

Why I need to be careful

Given the fall in the share price, it’s clear the business isn’t in a great spot right now. We’ll have to see what the full-year results look like, but I’d expect earnings to be heavily down.

As stated in the latest earnings report, “the Group’s policy is to maintain a dividend cover ratio in excess of two times”.

At the moment, the dividend cover is 2.1. This reflects how well the latest earnings can cover a planned dividend. So if the full-year results disappoint, this ratio should fall below two. In that case, I think there’s a threat that the dividend could be cut even more than forecast.

Not only would this reduce the dividend yield, but it could cause the share price to fall further. This is a high-risk stock for investors to consider. The future yield could be worth the risk, but I’m going to stay away right now.

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The coach operator, previously known as National Express, is now seemingly offering a yield of just over 10%. But is this too good to be true? Or are investors secretly looking at a terrific buying opportunity? Let’s take a closer look.

Rebound in the travel market

Following the evaporation of demand during the pandemic, coach operators saw their revenue streams dry up fairly quickly. Since then, the transport market has improved drastically. And companies like Mobico and FirstGroup have further benefited from the rail strikes which have driven up demand for bus transportation.

According to the latest results, Mobico’s bus passenger volumes have reached 97% of pre-pandemic levels. And by raising ticket prices, revenue is now ahead of 2019 levels. Yet, looking at the stock chart, things have gone from bad to worse. For reference, shares are down 60% over the last 12 months and 85% since the start of 2020. Meanwhile, rival firm FirstGroup has seen its market cap climb over 80% in the past year. What’s going on?

A profitability problem

While sales may have bounced back from Covid disruptions, the same can’t be said about earnings. The bottom line is still firmly in the red. And it seems management’s expected recovery timeline for profit margins wasn’t as accurate as they had hoped.

Short-term challenges are bound to emerge for any business trying to turn itself around. But in the case of Mobico, the lack of profits is particularly bad news because of its large pile of debt. As of June this year, the company has £1.5bn of borrowings.

With the cost of debt on the rise, the group’s interest expenses have grown by 47% year on year. And with operating profits unable to cover this expense, Mobico’s balance sheet is looking over-leveraged. Consequently, management has just announced that it is suspending dividend payments, making the current 10% yield an income trap.

A secret buying opportunity?

Investors expecting a reliable, chunking payout from this business are likely going to be sorely disappointed. However, with the share price already in the gutter, this news appears to have already been baked into the valuation. So, the question now becomes, is this a long-term turnaround opportunity?

Maybe. Management is currently looking to sell off its American school bus business to raise capital and pay down its debts. While this doesn’t solve all of its problems, the reduction in interest expenses will provide some much-needed breathing room.

At the same time, the company continues to roll out its cost-saving initiative to try to cut down annual expenses by £30m. And in its most recent trading update, the company believes a further £20m in savings can be achieved, which would be sufficient to push the business back into profitability, even with headwinds from driver wage inflation.

Therefore, I believe there is a future where Mobico can get back on track. However, a lot of things have to go right, starting with the successful disposal of its American school bus segment. But whether management can find a buyer has yet to be seen. Therefore, I’m personally keeping this stock on my watchlist for now.

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How to get started

To begin with, let’s cover some points. In order to have money to buy stocks, an investor would need to improve cash flow. This could be by cutting back on non-essential spending or increasing the primary income source. The left over money can then be used to invest in the stock market.

Another point to flag is that I’m not suggesting only holding two income stocks. A broad range of companies would be great for diversification over time. But in terms of starting, I really like these ideas below.

The start of a comeback

Mobico Group (LSE:MCG) is the name coach travel company National Express operates under. The company’s reach isn’t just confined to the UK, but has operations in places such as Germany and the US.

Over the past year the share price has fallen by 53%, which has certainly raised eyebrows. The dividend yield sits at 8%.

The company was hit hard by the pandemic, with public transport numbers falling off a cliff. It still hasn’t fully recovered.

The prospect of a very slow return to pre-Covid levels remains a risk. However, I think buying now could be the perfect time. The half-year results showed an 18.5% jump in revenue versus the same half last year.

Importantly, it re-established the dividend. Having not paid one out since Covid-19 hit, this is a huge positive. This is a key factor that makes me believe its management team is confident about future profits.

Looking forward, I see the dividend per share increasing, especially if it hits the forecasted adjusted operating profit of £200m-£215m.

Renewable energy is back

Next up is the Foresight Solar Fund (LSE:FSFL). The fund aims to generate both income and long-term capital growth by acquiring operational solar power plants. The vast majority of these are based in the UK.

The stock is down 15% over the past year, with a dividend yield of 7.95%. Interestingly, the net asset value (NAV) hasn’t fallen that much. This means the share price trades at a 22% discount to the latest quarterly NAV value.

I like the business because it’s the largest UK-listed dedicated solar energy investment company. I think solar is going to come back heavily in focus as a major renewable energy source in coming years.

This could be helped by new government grants to incentivise users. Either way, when investors start to think about how to invest in solar, Foresight Solar Fund is going to be one of the first names to pop up.

One concern I have is that the company limits the amount invested outside of the UK. I see this as narrow minded and could mean losing out on opportunities in Europe.

I’m thinking about buying both stocks in coming weeks due to the attractive yield, and think other investors should consider doing the same.

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With a regular investment in mind, here’s how I’m going to deploy £100 per month.

Surging profit

The first business I’m looking at is National Express (LSE:NEX). The shares are currently trading at 193p. In what has been a difficult period for the travel industry, the coach firm reported that group revenue rose over 33%, to £1.32bn, for the six months to 30 June.

Additionally, operating profit grew nearly 300% during this time to £90.5m. What this tells me is that demand appears to be recovering within this sector, to the benefit of the company.

What’s more, the business is starting to focus again on growth and expansion. It secured 16 new contracts, mainly in North America, that could bring in revenue in excess of £150m annually. 

This is part of the firm’s £2.1bn investment into expanding operations in the UK and North America. 

However, there is the threat posed by inflation. This may increase costs and, ultimately, lead to shrinking profit margins. Further pandemic variants, should they arise, could also dent demand for travel.

Despite this, the business has operating cash flow of £179m. This tells me that it should be able to survive any short-term issues that come to fruition. 

Solid income?

Secondly, I’m interested in Howden Joinery (LSE:HWDN). In 2021, the houseware-fitting services firm paid a dividend of 19.5p per share. That’s equivalent to a dividend yield of 0.79% at the current share price of 567p. 

While this may seem small, it’s good to know that I could derive income from my monthly investment. I’m aware, though, that dividend policies can be subject to change.

The business reported improved results for the six months to 12 June, with group revenue up 16.3%. In addition, pre-tax profit grew 21.6%, coming in at £145m. Another indication of Howden’s financial strength is its cash balance of nearly £250m.

However, the price of raw materials is continuing to climb on account of a tighter market and supply disruptions. This may lead to smaller profit margins.

On the other hand, the firm declared an interim dividend of 4.7p per share. This is a 9.3% increase year on year, and gives me continued confidence that income from this investment could be consistent.

Overall, both of these companies have performed well in challenging environments. To that end, I think they could be good homes for put my money on a regular basis. I’ll therefore add the shares of each business every month with £100.

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Helping people travel

As a quick reminder, National Express is a bus, train, light rail, express coach, and airport services travel provider based in the UK. It also has international operations in the US and Australia.

So what’s happening with National Express shares currently? Well, as I write, they’re trading for 186p. At this time last year, the stock was trading for 270p, which is a 31% decline over a 12-month period. It is worth noting that many travel stocks have seen their share prices struggle since the pandemic.

The bull and bear case

Firstly, I believe that National Express has a distinct advantage over many of its competitors in the travel sector. Its large size, coupled with its geographical footprint, is advantageous. Next, due to its profile and presence, it often wins lucrative contracts, which is positive for me as a potential investor. Contractual agreements usually offer stable revenue streams.

When the pandemic struck, National Express shares suffered badly. Demand for public transport dwindled and 2020 performance was reflected in this too. Revenue and profit levels dropped in 2020, after previous years of growth. The good news is that 2021 performance surpassed 2020, which means the business is on the right track once more. I am keen to see 2022 performance but in terms of looking back, I do understand past performance is not a guarantee of the future.

Next, at current levels, National Express shares look good value for money on a price-to-earnings ratio of just six. This tells me they could be excellent value to buy now and hold on to for the long term for growth and eventual returns.

National Express must navigate some serious headwinds currently, however. Soaring inflation, coupled with rising costs have placed real pressure on operations, performance, and returns. Profit margins are being squeezed by rising costs such as for fuel.

Finally, there have been talks of strikes across the travel sector in recent months, especially here in the UK where some have taken place. This could affect performance and returns, as well as investor sentiment for National Express.

My verdict

Overall, I would buy National Express shares for my holdings. I am buoyed by its profile, presence, and its past track record. The shares also look too good to miss on current levels.

I am not concerned by the current headwinds, and don’t foresee these as longer-term issues. In fact, the current cost-of-living crisis could be beneficial for National Express shares. This is because cheaper, low-cost travel options will increase in demand for consumers. This could boost performance and returns upwards.

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Book value is calculated by taking away the company’s liabilities from its assets and in theory, if a company stopped trading and sold all its assets, it would be left with its book value. When the book value is higher than the valuation, it’s a sign a stock may be undervalued. It’s not definitive, but it can be a very important metric. After the recent market sell-off, here are two bargain UK shares trading at less than book value I’d add to my portfolio.

Beaten-down travel stock

I’m a fan of National Express (LSE: NEX) and after its 35% fall over the past year, I feel it’s now too cheap for me to miss. At the end of 2021, the group had a book value of £1.45bn, whereas it currently has a market capitalisation of £1.1bn. That means the share price is trading at a 24% discount to its book value and signals that the shares are in deep value territory. 

There are several problems facing the transport operator today. Due to US wage inflation, the group expects its recovery in profitability to lag its revenue growth. Margins are expected to be only around 7% in 2022, lower than the 9% target. Longer term, if oil prices remain high, this could drive company’s costs even higher and would put more pressure on margins. 

However, I remain optimistic about the future for this UK share. For one, with the current cost-of-living crisis, it’s likely that consumers will want to switch to lower-cost transport. National Express could be one of the best options. 

Further, the group is confident it can deliver £1.25bn of free cash flow between 2022 and 2027. This cash will be partly reinvested into growing shareholder returns, and the dividend is expected to be reinstated after the FY2022 results. For these reasons, I’ll continue adding National Express shares to my portfolio.

Heavily-shorted UK stock

ASOS (LSE: ASC) is another company trading at less than book value. As of 28 February, the stock had a book value of £1.05bn, but a market cap of £900m. It means the shares currently trade at a discount of 14% to book value, implying bargain territory. 

The current macroeconomic environment has caused problems for the fast-fashion retailer, however. For example, it recently downgraded earnings expectations from £125m to between £20m and £60m. This saw the share price plunge around 30% on the day. It also explains why ASOS is one of the most shorted UK shares, just after Cineworld. This is another bearish sign.

Despite these worries, I’m still tempted to open a small position in ASOS. For example, as noted by Barclays, there are “green shoots in the US market”, where the company saw 21% year-on-year sales growth. With a customer base of 27m, I also feel like its long-term future is bright, especially when inflationary pressures start to die down. Therefore, I may use the group’s discount to its book value as a sign to buy. 

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