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I think I got one of the cheapest shares in the UK. And yet it rarely gets talked about on social media, rarely appears on consumer recommendation lists, and occasionally makes the financial headlines.
Which company am I talking about? And why do I think its stock is so cheap? Let’s find out.
WHO?
Group of Frasers (LSE:FRAS), perhaps best known for owning retailers Sports Direct and House of Fraser, is a stock that often flies under the radar. However, since Mike Ashley opened his first store in 1982, it has grown exponentially.
Although he is no longer involved with the club’s day-to-day management – that is left to his son-in-law Michael Murray – Ashley still holds an estimated 73% of the shares.
Looking at the group’s latest earnings release we know that for the 52 weeks to 26 October 2025, its basic adjusted earnings per share (EPS) was 96.9p. This means that the stock is currently (27 March) trading at 6.6 times historical earnings. For context, the five-year average (median) is 9.3.
And there’s more…
However, dig deeper, and the stock looks cheap. The group’s recent strategy of establishing minority positions in other stores and brands has seen it build a large investment portfolio. On 26 October 2025, these were worth £1.2bn. And because of the way they are calculated, and the fact that some of them are lost, they contribute very little to the overall trading performance of the group.
If £1.2bn is taken out of the club’s mark-up, it means Frasers trade at just 3.8 times historical earnings.
Not finished yet…
But it doesn’t end there. Towards the end of 2025, the group acquired two sites, Braehead Shopping Center and Swindon Designer Outlet Centre. Although the club did not disclose how much they paid, reports suggest they cost £220m and £145m respectively. If these figures are removed from the group’s current stock market valuation, its price-to-earnings (P/E) ratio drops to just three. That’s surprisingly low for such a large — and profitable — group.
Of course, all my figures are based on retrospective income and it is clear that many UK retailers are struggling at the moment. Reduced revenue and increased employment costs are affecting Frasers’ top and bottom lines.
However, even if the EPS has fallen significantly this fiscal year, I still think the stock looks cheap. Analysts have set a 12-month share price target of 753p, suggesting the group could be undervalued by around 18%. As recently as July 2024, its shares were changing hands at around 900p.
It is hard to know why this group is not popular. I suspect it is considered old fashioned. After all, it’s about as far from the tech industry as you can get. It’s also UK-centric, meaning it relies on a domestic economy that’s still a bit shaky at the moment. Having one potential shareholder doesn’t help either. And is a member of FTSE 250which means it can be ignored.
However I still think Frasers stock is in a bargain at the moment. And just one of many UK stocks that I believe deserve wider consideration by serious investors.
