UK stocks are cheap, but they won't be for long

UK stocks are cheap. That's not escaped the notice of the private equity sector, who are snapping up bargains galore. You should do the same while you still can, says Merryn Somerset Webb.

William Hill betting shop sign
William Hill: a target for private equity
(Image credit: © Alamy)

Ask any banker or lawyer who works in private equity how busy he or she is right now, and you’ll get the same answer, says Ben Martin in The Times. This is, one lawyer told him, “the busiest period we’ve seen in the last 20 years”. There have been three £1bn-plus bids for FTSE 250 stocks in the last week – and so far this year 38 UK stocks (including RSA Insurance, William Hill and Aggreko) have become merger or takeover targets to a value of about £42bn.

You can see this as good news. Until recently, much of the rest of the world (and much of the UK too) had fallen for the idea that post-Brexit Britain would be a basket case. They priced our assets accordingly – Simon French of Panmure Gordon (MoneyWeek podcast with him coming soon) reckons that even after controlling for our heavy weightings to low-growth stocks, “UK public companies remain between 10% and 15% undervalued against their international counterparts”. It could be more: John explains in this week's magazine that on one measure at least, the UK is on a 40% discount to the US.

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Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.