With the UK stock market near record highs, these top stocks are still cheap!

changed to +4.37% for the week FTSE 100 appears to be outperforming the world’s major stock markets. Earlier this week, it broke a new record high above 10,480 points.

I Dow Jones is close behind with a gain of 3.62%, while i S&P 500 is decreasing, increasing by only 1.55% this year. Meanwhile, China SEE 50 decreased by 0.37%.

This may be good news for Britain’s growth hunters but what does it mean for value seekers?

The price is still to be determined

If you are an investor, don’t despair just yet. There is still a bargain to be found in the FTSE 100 as well FTSE 250.

Another thing to consider, for example, is Saber Insurance Group (LSE: SBRE). The small £320m insurer has fallen 51.5% over the past five years. But with strong income growth, it now looks attractively priced. It has a price-to-earnings (P/E) ratio of just 0.23, suggesting that the market is yet to realize its full potential.

Even if the price doesn’t rebound, the stock’s income potential makes it worth considering. At 9%, its yield is above average, as it grew by 44% last year. The risk is that the coverage is small, and 91% of the income goes to the shareholders. At the moment, this is sustainable but if the income does not improve, it is possible to reduce.

Companies with smaller markets can be more volatile, so analysts seem to be divided on where the price could head. While some see growth of 52.9% over the next 12 months, others expect a decline of 15.9%.

Encouragingly, earnings per share (EPS) are expected to double between 2023 and 2024, from 7p to 14p. Earnings are expected to continue to grow at a rate of about 7% over the next three years.

Is it too dangerous?

For those looking for a safe bet, BP Marsh and Associates it’s the smallest £231m you can imagine investing in insurance firms. With a return on equity (ROE) of 35.8% and a current ratio of around 40, it appears highly profitable and extremely liquid.

But the best part is the P/E ratio of just 2.36. This represents deep value relative to peers and is supported by 165% revenue and 97% earnings growth, year over year.

Of course, its small market and exposure to insurance cycles add risk, not to mention volatility from low volatility. But overall, it seems the market is yet to pay a price for this growth engine, so it could deliver a big payday for patient investors.

An important point

For value hunters, these two stocks can be hidden gems in the UK stock market. However, they should be considered as part of a diversified portfolio, without being allocated more than 5% of the portfolio.

BP Marsh and Partners appears to be printing money, with high profits. But whether that gain will translate into share price gains remains to be seen. Only time will tell.

Meanwhile, Saber is a high-risk/high-value play with a lot of promise, but further growth could be affected by rate changes or economic volatility. However, the high yield and seven-year track record make it an option to consider for both value and income.