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

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.

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Associated British Foods PLC1,726.00 GBX-1.57
BT Group PLC115.00 GBX0.17
Imperial Brands PLC1,569.50 GBX2.58
National Grid PLC871.00 GBX-4.45
RELX PLC1,638.00 GBX-1.44

About Author

Karen Kwok

Karen Kwok  is a Reporter for Morningstar.co.uk

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