Most Overvalued FTSE Stock

THE VALUE INVESTOR: United Utilities is rated as a one-star stock by Morningstar analysts, meaning it is trading at significantly more than its Fair Value share price

Emma Wall 26 March, 2014 | 2:57PM

Successful investment is all about timing. Knowing when to be brave, and pick up a cheap stock down on its luck – and knowing when to trim a holding, take profits and sell a company that has made you money.

United Utilities (UU.) is rated a one-star stock by Morningstar analysts. Morningstar equity analysts use qualitative and quantitative research to determine a share’s Fair Value, and from this they award it a star rating. A stock with a five star rating is trading at significantly less than its Fair Value – and one that has been awarded one star is considered by analysts to have a share price much greater than the Fair Value estimate.

United is the only one-star stock listed on the UK stock market; analysts consider a fair value of the company to be £5.89 a share, but today it is trading at around £8 a share.

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
United Utilities Group PLC864.60 GBX-2.04

About Author

Emma Wall  is former Senior International Editor for Morningstar

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