Analysis from investing and trading platform IG has identified a list of Black Friday bargain UK stocks delivering strong long-term returns while trading on a discount.
This year has seen record highs for the FTSE 100, with the UK on course to outperform the S&P 500 for the first time since 2016. While the surging UK market has made bargain stocks more difficult to come by, there remain a good few available to investors who know where to look.
These include the mining group Atalaya, software specialist Sage Group, and educational firm Pearson. Each has outpaced the broader FTSE 350 over the past five years – and now trades on a significantly lower price-to-earnings (P/E) ratio compared to its five-year average (see table below).
The P/E ratio is used by investors as a quick measure of how attractive a company’s stock is, with a lower P/E ratio indicating that a company could be undervalued.
Retail giant Sainsbury’s currently offers the biggest bargain for UK stockpickers, with its P/E ratio 73% below its five-year average, despite returning 113% over five years. While the supermarket has enjoyed strong growth over the last five years, investors may be put off by concerns over the slowdown in UK grocery demand, ongoing competition from challenger firms Aldi and Lidl, and doubts about how much margin it can retain as food inflation cools.
While Sainsbury’s appears the most undervalued company across the FTSE 350, it’s a very different story for its more premium competitor M&S, with IG’s analysis showing the retailer is trading on a whopping P/E ratio of 375 – representing a 77% premium to its five-year PE average.
Other household names trading on significant premiums to five-year PE averages include Dr Martens (+82%), mining firm Fresnillo (+42%), and HSBC (+33%).
Table shows FTSE 350 companies that have outperformed market over five years, ranked by P/E ratio discount
| Rank | Company | Year-to-date share price performance | 5-year total returns (share price growth + dividends) | Current P/E ratio | % change in P/E ratio versus 5-year average |
| 1 | Sainsbury’s | 24.6 | 113.5 | 18.2 | -72.50% |
| 2 | Investec | 7.5 | 356.1 | 7.9 | -27.81% |
| 3 | 4imprint Group | -17.0 | 94.8 | 12.7 | -24.61% |
| 4 | Sage Group | -11.6 | 85.6 | 32.3 | -24.38% |
| 5 | Pearson PLC | -21.1 | 90.4 | 15.2 | -23.53% |
| 6 | ATALAYA | 95.8 | 329.3 | 15.0 | -13.23% |
| 7 | RELX | -13.6 | 91.0 | 30.2 | -13.14% |
| 8 | Senior | 18.4 | 250.8 | 21.8 | -9.10% |
| 79 | TBC Bank Group | 21.3 | 357.7 | 5.6 | -5.58% |
| 10 | Premier Foods | -7.8 | 92.6 | 12.1 | 0.07% |
Data taken from Bloomberg after market close on 13th November 2025. Past performance is not an indicator of future results.
Chris Beauchamp, Chief Market Analyst at IG said “Despite the surge in UK stocks this year, there are still bargains to be found for those taking a long term view.
Capital flight out of the US has boosted the domestic stock market considerably, but some companies have benefitted more than others. Household name Sainsbury’s continues to trade at a hefty discount to its five-year average valuation – especially when considered against competitors such as M&S – as do software firm Sage and education group Pearson. While there is no sure thing in markets, buying strong performers at a discount provides some measure of protection against market falls.
“While attractive price to earnings ratios can be a good indicator of a bargain, it’s still advisable to consider companies’ historical performances and wider market contexts. Pearson, for example, still carries a legacy of uneven earnings and a disrupted education market, while Sage continues to grow more slowly than global software peers.”
