As far as I can tell, Frasers Group (LSE:FRAS), the FTSE 250 owner of Sports Direct, doesn’t sell replica Millwall Football Club kits. But despite this, I wonder if the two institutions do have one thing in common. Since the 1970s, supporters of the South London club have sung “No one likes us, we don’t care” to the tune of Sailing by Rod Stewart. And it wouldn’t surprise me if Mike Ashley, the majority shareholder in the retail empire, has something similar written on his office wall.

A powerful force

Although he’s not a director of the group, Ashley remains an advisor to the board and its chief executive is his son-in-law, Michael Murray. And with a 70%+ stake, Ashley’s clearly influential. However, over the years, I think it’s fair to say that he’s been a controversial figure. He’s had run-ins with MPs and his public falling out with the board of Boohoo Group‘s a good example of his combative style.

But a bit like Millwall fans, I suspect investors who took a stake five years ago don’t care about Ashley’s reputation. That’s because, since June 2020, the group’s share price has risen 120%. This is against a backdrop of a struggling high street and business rates putting bricks and mortar stores at a disadvantage to their online rivals. If that’s not difficult enough, the big rise in employer’s National Insurance has significantly increased costs for the group that employs over 30,000.

Out of favour

And recent economic uncertainty (both here and abroad) has affected its stock market valuation. The group fell out of the FTSE 100 in December 2024. At 27 June, they changed hands for 26% less than their 52-week high.

But I think the stock could be one of the most undervalued on the UK market. Over the years, the group’s built stakes in other retail businesses. Based on stock exchange filings – and current market prices – I reckon these “strategic alliances” are worth around £962m. This excludes a put option which – if exercised — could see it lift its stake in Hugo Boss to 42.9%.

Tremendous value for money

If my estimate’s deducted from the group’s current market-cap of £3.04bn, it means the trading businesses that Frasers controls are valued at around £2.08bn.

For the year ended 30 April (FY25), analysts are expecting earnings per share of 96.9p. If they are right, the stock’s currently valued at just 4.8 times the profit of its trading divisions.

And despite various challenges that it’s faced over the years, the group’s consistently delivered. Turnover’s now 40% higher than it was in FY20 and its operating margin has doubled. Impressively, despite operating over 1,500 stores in the UK — and others in 20 more countries — it’s managed to embrace the internet.

For these reasons, I recently took a stake and other investors could consider doing the same.

I’ll know more about the group’s current trading when it releases its annual results. Usually this happens in July and most listed companies publish the date well in advance. But typically — thumbing its nose to convention — Frasers hasn’t said when its numbers will be released. Although to be honest, I don’t care when I get to see them just as long as they show a strong performance!