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UnBrexit – the next driver for British stocks? - Undervalued Shares
Will British politics soon debate rejoining the European Union – and would that fuel speculative interest in the UK market?
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December 26, 2025 at 7:12 AM
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9/ Despite a weak macro backdrop and corporate earnings having fallen by 15% over the past two years, UK equities have performed strongly. In 2026 and 2027, UK corporate earnings are forecast to recover by 5% and 15%, respectively.
December 26, 2025 at 7:12 AM
9/ Despite a weak macro backdrop and corporate earnings having fallen by 15% over the past two years, UK equities have performed strongly. In 2026 and 2027, UK corporate earnings are forecast to recover by 5% and 15%, respectively.
8/ Being bearish on the UK has almost become an obsession. The reality, however, looks very different. The average maturity of UK government debt is just under 14 years, debt-to-GDP ratio stands at just 89%, and the most recent gilt auction was 2.4x oversubscribed.
December 26, 2025 at 7:12 AM
8/ Being bearish on the UK has almost become an obsession. The reality, however, looks very different. The average maturity of UK government debt is just under 14 years, debt-to-GDP ratio stands at just 89%, and the most recent gilt auction was 2.4x oversubscribed.
7/ Ideas to consider should the UK rejoin: i) potential M&A targets that could be of particular interest to EU buyers, ii) a boost to the FTSE 250 which could be played via an ETF, iii) a tailwind for sterling. Until then, the UK market is likely to perform well regardless.
December 26, 2025 at 7:12 AM
7/ Ideas to consider should the UK rejoin: i) potential M&A targets that could be of particular interest to EU buyers, ii) a boost to the FTSE 250 which could be played via an ETF, iii) a tailwind for sterling. Until then, the UK market is likely to perform well regardless.
6/ Additional momentum could come from a renewed push to rejoin the EU: i) it would make for a powerful narrative, ii) it would be a genuinely new theme, iii) millions of investors in Britain and abroad could latch onto it as a conviction play.
December 26, 2025 at 7:12 AM
6/ Additional momentum could come from a renewed push to rejoin the EU: i) it would make for a powerful narrative, ii) it would be a genuinely new theme, iii) millions of investors in Britain and abroad could latch onto it as a conviction play.
5/ Since the 2016 referendum, the British stock market has become progressively cheaper when measured by price/earnings ratio. Relative to global peers, UK equities have rarely looked cheaper. M&A activity has sparked a re-rating of the UK market.
December 26, 2025 at 7:12 AM
5/ Since the 2016 referendum, the British stock market has become progressively cheaper when measured by price/earnings ratio. Relative to global peers, UK equities have rarely looked cheaper. M&A activity has sparked a re-rating of the UK market.
4/ However, Starmer may not survive as Labour leader beyond the May 2026 local elections, and UnBrexit might not be a vote winner at all. Timing is another issue; Labour would likely wait until 2027 to make such a pledge, ahead of the 2029 election.
December 26, 2025 at 7:12 AM
4/ However, Starmer may not survive as Labour leader beyond the May 2026 local elections, and UnBrexit might not be a vote winner at all. Timing is another issue; Labour would likely wait until 2027 to make such a pledge, ahead of the 2029 election.
3/ Currently trailing badly in the polls and struggling to define what it stands for, Labour could position itself as the rejoin party. That might put off some traditional voters but attract a much larger group of new ones. Higher turnout could play a decisive role.
December 26, 2025 at 7:12 AM
3/ Currently trailing badly in the polls and struggling to define what it stands for, Labour could position itself as the rejoin party. That might put off some traditional voters but attract a much larger group of new ones. Higher turnout could play a decisive role.
2/ Britain's relationship with the EU may return to wider debate sooner than many expect: both Prime Minister Sir Keir Starmer and Deputy Prime Minister David Lammy refused to rule out the UK rejoining the EU. Could the UK's next General Election become a de facto Referendum #2?
December 26, 2025 at 7:12 AM
2/ Britain's relationship with the EU may return to wider debate sooner than many expect: both Prime Minister Sir Keir Starmer and Deputy Prime Minister David Lammy refused to rule out the UK rejoining the EU. Could the UK's next General Election become a de facto Referendum #2?
1/ Since the 2016 Brexit referendum, around 6m British voters have died. Around 5m of them will have voted, and 3.2m voted Leave. These demographic changes are now shifting the balance of opinion in favour of Europhiles.
December 26, 2025 at 7:12 AM
1/ Since the 2016 Brexit referendum, around 6m British voters have died. Around 5m of them will have voted, and 3.2m voted Leave. These demographic changes are now shifting the balance of opinion in favour of Europhiles.
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"Utterly hated" – a contrarian call from my London dinner - Undervalued Shares
Will the narrative around British pub chains start to change soon? Insights from my recent London dinner.
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December 19, 2025 at 5:49 PM
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9/ It's a company that can benefit from i) an ongoing return of capital to shareholders, ii) the rapid growth of a new "asset-light" franchise division, iii) its founder and major shareholder who may be considering an exit over the medium term. And it's undervalued (obviously)!
December 19, 2025 at 5:49 PM
9/ It's a company that can benefit from i) an ongoing return of capital to shareholders, ii) the rapid growth of a new "asset-light" franchise division, iii) its founder and major shareholder who may be considering an exit over the medium term. And it's undervalued (obviously)!
8/ For investors who share that concern, there are also larger pub companies to consider – such as this one 👇
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The return of the great British pub - Undervalued Shares
British pub stocks are down 50-80%. Could they deliver a recovery similar to that seen in the banking sector?
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December 19, 2025 at 5:49 PM
8/ For investors who share that concern, there are also larger pub companies to consider – such as this one 👇
www.undervalued-shares.com/reports/inve...
www.undervalued-shares.com/reports/inve...
7/ The London market offers an entire range of listed pub companies to pick from. Some lesser-known names include Daniel Thwaites, Marston's, and Shepherd Neame. However, many of these companies may simply be too small to attract meaningful attention, particularly from US investors.
December 19, 2025 at 5:49 PM
7/ The London market offers an entire range of listed pub companies to pick from. Some lesser-known names include Daniel Thwaites, Marston's, and Shepherd Neame. However, many of these companies may simply be too small to attract meaningful attention, particularly from US investors.
6/ 2025 has already delivered meaningful improvements: an increase in average weekly pub sales, a forecast slowdown in pub closures from 2026, and an expected 2% p.a. revenue growth through 2028. Larger pub chains are likely to outperform as they continue to take market share.
December 19, 2025 at 5:49 PM
6/ 2025 has already delivered meaningful improvements: an increase in average weekly pub sales, a forecast slowdown in pub closures from 2026, and an expected 2% p.a. revenue growth through 2028. Larger pub chains are likely to outperform as they continue to take market share.
5/ Over the past few years, the pub industry faced the proverbial perfect storm: Covid lockdowns, rising living and energy costs, additional taxes. It makes for dramatic headlines, but this may be precisely the moment when a contrarian bet makes sense.
December 19, 2025 at 5:49 PM
5/ Over the past few years, the pub industry faced the proverbial perfect storm: Covid lockdowns, rising living and energy costs, additional taxes. It makes for dramatic headlines, but this may be precisely the moment when a contrarian bet makes sense.
4/ Could British pub chains be next? They now also trade at single-digit earnings and – like banks once – they are widely hated. The prevailing perception is that of a dying industry: since 2000, the number of pubs in Britain has fallen from 60,000 to just 38,780.
December 19, 2025 at 5:49 PM
4/ Could British pub chains be next? They now also trade at single-digit earnings and – like banks once – they are widely hated. The prevailing perception is that of a dying industry: since 2000, the number of pubs in Britain has fallen from 60,000 to just 38,780.
3/ One sector where many investors now regret not getting in earlier is British banks. Over the past few years, British bank stocks have turned into stellar performers. Including dividends, NatWest is up ≈150%, Barclays around ≈175%, and HSBC ≈125%.
December 19, 2025 at 5:49 PM
3/ One sector where many investors now regret not getting in earlier is British banks. Over the past few years, British bank stocks have turned into stellar performers. Including dividends, NatWest is up ≈150%, Barclays around ≈175%, and HSBC ≈125%.
2/ The problem, of course, is obvious. You can be right about the sector, and still not own the companies that get bid for. There are situations where you might not want to own just an individual stock, but an entire sector.
December 19, 2025 at 5:49 PM
2/ The problem, of course, is obvious. You can be right about the sector, and still not own the companies that get bid for. There are situations where you might not want to own just an individual stock, but an entire sector.
1/ In the UK market, M&A has been the dominant catalyst for exits and re-ratings. Low valuations combined with ongoing takeover activity have made this approach quite lucrative. In recent years, average bid premia in the UK have risen from around 20% to 48%.
December 19, 2025 at 5:49 PM
1/ In the UK market, M&A has been the dominant catalyst for exits and re-ratings. Low valuations combined with ongoing takeover activity have made this approach quite lucrative. In recent years, average bid premia in the UK have risen from around 20% to 48%.