5 Overvalued UK Stocks

THE VALUE INVESTOR: Investors might need to keep an eye on the following stocks as Morningstar analysts see them trading at significantly more than their fair value 

Karen Kwok 11 January, 2016 | 3:34PM
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Morningstar star ratings can help investors determine which stocks are overvalued. Whereas the fund and ETF star ratings are both backward-looking quantitative measures of a fund's risk versus reward profile, the stock star rating is completely different. It's both quantitative and qualitative, for starters, and it's meant to be forward-looking.

If a stock has a low star rating, that means Morningstar equity analysts think the shares are overvalued, and the share price could drop in the future.

There is currently one stock in the U.K. that Morningstar analysts rate one star, and we highlight it with four stocks with a two-star rating.

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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.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Associated British Foods PLC1,793.00 GBX-0.03Rating
BT Group PLC142.00 GBX-0.87Rating
Imperial Brands PLC1,582.50 GBX0.22Rating
National Grid PLC936.70 GBX1.51Rating
RELX PLC2,254.00 GBX0.49Rating

About Author

Karen Kwok

Karen Kwok  is a Reporter for Morningstar.co.uk