Looking for life beyond the FTSE 100? UBS thinks the UK’s midcap market is hiding some seriously overlooked gems - and it’s just refreshed its top 10 picks with three new names it says are ready to shine.
Marks & Spencer, British Land and Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF) are the latest additions to the bank’s high-conviction UK midcap list, which has already outperformed the FTSE 250 by 700 basis points since launching last May.
That’s no small feat in a market where investor interest has often felt about as lively as a January high street.
This month’s rejig sees easyJet, Moonpig and Whitbread make way, with UBS favouring companies offering clear near-term catalysts and what it calls “compelling valuation upside”.
British Land is all about the discount - shares are trading 36% below net tangible assets, a gap UBS thinks could close as sentiment improves around retail parks and Central London offices.
Meanwhile, M&S is cast as a turnaround story that’s “structurally improved”, with recent momentum in both food and clothing setting the stage for a potential re-rating.
Endeavour Mining, meanwhile, brings some defensive sparkle to the mix. UBS sees the West African gold producer at a free cash flow “inflexion point”, with falling debt and rising returns as production ramps up.
Despite broader concerns about UK consumer demand and fund outflows, the bank remains upbeat on the mid-caps.
It reckons there’s 33% average upside across its top 10, which still includes names like Rightmove, Persimmon, Domino’s and Beazley.
UBS’s bet is clear: Quality UK midcaps are cheap, unloved and ready for a reappraisal. For investors tired of waiting for momentum to return, this list is a confident answer to the question: where’s the value hiding now?