Despite the FTSE 100's marginal decline in July, the UK market looks to be exactly fairly valued at present, with current share prices reflecting our analysts' long-term valuations for each stock in aggregate. While undervalued opportunities are diminishing, there are still a handful of stocks that the market is failing to appreciate.
Among them, 
De La Rue (DLAR) stands out. This company offers services that centre on the design, printing and handling of currency and security documents—it literally prints money, and is a long-established leader in its industry.
De La Rue currently trades around 730p per share, which represents an 11% discount to our fair value estimate of 873 pence. The currency designer and printer has relationships with 150 countries, with 38% and 7% of its revenue generated in Europe and the Americas, respectively, and the balance coming from around the globe.
Morningstar senior business services analyst Brett Horn notes that it might be surprising that any country might choose to outsource such a vital component of its economy, but many small countries lack the resources to cost-effectively design and print a secure currency. De La Rue steps in to fill this gap, taking advantage of the scale efficiencies of handling so many currencies to offer countries these services at a substantial discount to the cost they would incur in doing it themselves, but still at a price that locks in economic rents.
De La Rue is not only currently undervalued, as represented by its 4-Star rating, but it also boasts a wide ‘economic moat’ or sustainable competitive advantage, meaning it does a great job of warding off potential competition and will continue to do so.
