Eight UK shares the pros are finding plenty of value in

It’s been a year of two halves for UK equities with the FTSE 100 reaching record highs in the first quarter before the Middle East conflict and political instability rattled markets going into the second quarter.

Amongst it all there have been winners and losers, and the disparity between the two has never been greater, Jupiter’s Adrian Gosden says.

“I’ve been a fund manager for 30 years and I’d describe the current situation as quite extreme,” he says.

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Gosden, who manages Jupiter UK Income Fund I Acc (B5VXKR9) and Jupiter UK Multi Cap Income W GBP Acc (BRC7L26), points out that those who invested in UK banking and mining stocks would have fared well.

He notes that over this period Barclays (LSE:BARC) is up over 150%, which Gosden points out “is extraordinary when you consider the long-term return for UK equities on a per annum basis over the last 100 years is 8%”.

Construction and real estate

Meanwhile, some domestic-facing UK stocks – particularly those in construction and real estate – have had a torrid time over the past year, for example brick manufacturer Ibstock (LSE:IBST) is down nearly 40%.

In the Jupiter UK Income fund, Gosden sells holdings that have outperformed to finance unloved companies on the premise that they could become popular. At the end of 2025, Gosden bought logistics property developers Segro (LSE:SGRO).

“Segro shares were trading at 600p, a big discount to its 925p net asset value (NAV), so it was very out of favour, and with that came a dividend yield of 5%, which is more than cash off a very good asset base.”

However, Gosden admits the timing of the rotation was not optimal. “Since we invested in Segro, we’ve had a war. The interest rate curve went up, confidence dropped, and you didn’t want to own construction or real estate.

“However, that’s changing now. The oil price has gone back below $70 and we’re hopeful that consumer confidence and business confidence comes back, and those shares can do better.”

Banks have had a strong run, where is the value?

Barclays may have seen stonking returns lately, but other constituents of the financial services sector have had a more troubled time.

Global bank Standard Chartered (LSE:STAN) is up 61% over one year and has its share price trading close to a record high, but it experienced a sell-off earlier this year following the departure of its chief financial officer.

More recently its share price weakened, but then subsequently recovered, amid fears it would be affected by new rules preventing residents of mainland China ​from ​opening offshore accounts at major Hong ⁠Kong banks.

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However, Alex Wright, portfolio manager of the Fidelity Special Situations W Acc (B88V3X4) fund and investment trust Fidelity Special Values Ord (LSE:FSV), remains bullish on the outlook for the UK-listed bank.

“Standard Chartered offers an opportunity to tap into strong emerging market growth, which is a real play on Asian wealth growth,” he says. “It is probably the fastest-growing regional wealth manager, a division that generates about a third of the group’s overall profits.”

He adds: “Periods of volatility and uncertainty, which can worry most investors, actually benefit banks such as Standard Chartered because active trading books and investment banking operations tend to thrive in these environments. Higher volatility has been good for trading income, and I expect that side of the business to continue benefiting from uncertainty.”

Further down the market-cap scale is UK specialist bank Paragon Banking Group (LSE:PAG), which has fallen out of favour after profits dipped and concerns over rent freezes took hold.

While Andy Burnham – expected to become the next prime minister – might bring further headwinds to the rental markets, which could weigh on sentiment towards Paragon, Aberdeen’s Abby Glennie says that the FTSE 250 stock is already trading on a low price to earnings of 7x, but has a dividend yield of 6% and an ongoing £100 million share buyback programme.

Glennie, co-manager of abrdn UK Smaller Companies I Acc (0433349) fund and Aberdeen UK Smaller Cos Growth Trust plc (LSE:AUSC), says: “Paragon is generating attractive returns, displays strong credit quality having lent through many cycles, focuses on professional landlords that are less the target of government forces, and has good funding structures in place.”

Beyond banks

In the small-cap space, Aberdeen’s Iain Pyle rates Brooks Macdonald Group (LSE:BRK), which he recently added to the Aberdeen Equity Income Trust (LSE:AEI), despite the UK wealth manager’s recent spate of underperformance during its operational transition.

“The business has seen client outflows in key segments, particularly its bespoke portfolio service, alongside market volatility impacting asset values,” he explains.

“At the same time, profits have been pressured by higher costs associated with acquisitions and integration activity, as well as organisational restructuring to reposition the firm. These factors have led to declining margins and reduced profitability, despite growth in assets.”

Brooks Macdonald is now repositioned as a UK‑focused, scaled wealth manager with an expanded financial planning capability, and Pyle says the case for its recovery centres on the new management team’s strategy to “reignite growth”.

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“Early signs of stabilisation are evident in improving flows and revenue growth, supported by investments in digital capability, product expansion and distribution,” he says.

Other smaller company stocks the pros are backing 

Stuart Widdowson, co-portfolio manager of the Odyssean Investment Trust Ord (LSE:OIT), notes that there are plenty of opportunities in the unloved small-cap sector due to the perception that these companies are dependent on the health of the UK economy.

However, Widdowson says the average company in Odyssean’s portfolio derives 80% of its revenue from outside the UK. 

“We particularly like companies that are global market leaders in a growing niche that are inexpensive today, but where management teams are driving improved long-term performance.

He picks digital market business Auction Technology Group (LSE:ATG) as an example.

“Auction Technology Group has struggled since IPO despite its market leadership positions. It recently appointed a new CEO – Duncan Painter – who has an excellent track record. The company derives most of its revenue from North America and we believe its shares are trading at a material discount to its intrinsic value.”

Photo: Pavlo Gonchar/SOPA Images/LightRocket via Getty Images.

Bargains among the software sell-off?

Many tech and tech-adjacent companies have been on shaky ground for the past year triggered by a mix of risk aversion, concerns about stretched valuations, and fears generative AI could disrupt the models of established data and professional services companies.

Experian (LSE:EXPN)’s share price has been dragged down by such worries, but for Carl Stick, fund manager of Rathbone Income Fund I Acc (B3Q9WG1), it is still a buy.

“We think the market has overlooked the enduring value of the company's proprietary database of consumer and commercial credit information, built up across the world over many decades,” he says.

“This is the kind of asset that is extremely difficult to replicate, regardless of advances in AI.”

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Madeline Wright, co-portfolio manager of the Finsbury Growth & Income Ord (LSE:FGT) trust, suggests recent developments in AI have actually been positive for Experian.

“Experian has been able to demonstrate concrete examples of AI innovation, becoming available across product sets and platforms,” she says. “These include ‘Experian Assistants’ within the Ascend Platform; AI powered-model risk management features; strong market adoption of the AI-led Patient Access Curator in healthcare; and even a consumer-facing agentic AI assistant, ‘EVA’.

Another tech company pivoting to play the AI story is NCC Group (LSE:NCC), which recently sold its Escode business to focus on its cybersecurity offering in response to the rising demand for complex cybersecurity solutions as AI adoption soars.

“The implied valuation of the remaining cyber business in our view assumes no margin improvement – despite there being a credible plan to significantly improve margins – and negligible growth. This seems extremely pessimistic,” Widdowson says.

Under-the-radar opportunity?

Outside the mainstream sectors, niche company Fisher (James) & Sons (LSE:FSJ) – a maritime services business – appears to be turning a corner.

The B2B service provider, which operates across defence and energy as well as maritime transport, has had a difficult past due to heavy debt and cancelled offshore projects, but Glennie believes the group is at an inflection point now that it is over halfway through its turnaround plan.

“Non-core disposals have halved leverage, and the pivot to an asset-light engineering services model is driving margin and return on capital employed higher, with credible medium-term targets of 10% margin and 15% ROCE underpinning strong earnings forecasts,” she says.

“Management are three years into their five-year ‘One James Fisher’ plan and the heavy lifting is done.”