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UK shares have been on a fantastic winning streak in 2025. The FTSE 100 has climbed by over 10% reaching a new record high, with the FTSE 250 not too far behind. Yet despite delivering robust growth, plenty of stocks are still trading at beaten-down valuations. And the same is true for quality businesses dealing with short-term headwinds.
That certainly seems to be the case for three stocks on my radar: Melrose Industries, Premier Foods, and Somero Enterprises (LSE:SOM). All three have failed to keep up with the wider market in 2025 despite robust underlying fundamentals. So could these present a buying opportunity?
| Company | Industries | YTD Return | Price-to-Earnings Ratio |
| Melrose Industries | Aerospace & Defence | -6% | 12.3 |
| Premier Foods | Food Producers | +3% | 13.6 |
| Somero Enterprises | Industrials | -32% | 8.9 |
Digging deeper
To determine whether or not these UK shares are indeed a bargain, we need to examine exactly what’s going on under the hood, and why investor sentiment’s proving weak. With that in mind, let’s take a closer look at the seemingly cheapest of the bunch – Somero Enterprises.
As a quick reminder, the company’s the global leader in laser-guided concrete screed machines. For non-residential construction projects, these devices are essential for achieving a high-quality flat finish in commercial properties like warehouses, data centres, and carparks, among others.
Despite being listed here in the UK, the bulk of Somero’s business is done in North America. And sadly, with persistently high interest rates, many of these construction projects are being delayed or put on pause. This headwind’s made growth exceptionally challenging, forcing management to revise its 2025 guidance downward – a move that sent its shares plummeting.
Is this an overreaction?
The slowdowns and broader economic uncertainties are understandably frustrating. And it’s a good reminder of how cyclical the construction market can be. Yet, short-term cyclicality concerns can create lucrative entry points for long-term focused investors.
Despite the challenges, the order book and list of project backlogs remain robust, suggesting that demand isn’t lost, merely postponed. And looking at the recent insider trading activity, management would appear to agree with this conclusion. In fact, Thomas Anderson, a non-executive director, has recently bought $73.5k of shares in May.
In the meantime, Somero’s still a highly cash-generative enterprise, with strong margins, a global market niche, and a wide competitive moat protected through constant innovation. As such, the balance sheet remains in tip-top shape, and dividends have continued to flow.
Of course, a prolonged cyclical downturn could eventually change that. And with uncertainty over how long it will take for US interest rates to fall and non-residential construction to ramp back up, Somero shares could tumble further as sentiment remains weak.
The bottom line
Given the undemanding valuation and the company’s top dog status within its niche, Somero’s looking quite attractive, in my opinion. That’s why I’m considering expanding my existing position in my portfolio. It’s a similar story for the other UK shares on this list, who also have their fair share of challenges and opportunities ahead.
While there are never any guarantees, all three stocks look well-positioned for a rebound in the coming years. As such, investors may want to start investigating further.
