UK stocks are outperforming the U.S. and one CIO says they look 'very cheap'

U.K. stocks are finally turning a corner after years of underperformance, according to one chief investment officer, who stressed that valuations are looking "very cheap."

The U.K. FTSE 100 is up around 11% over the last three months, while the broader FTSE 250 index is more than 9% higher. In comparison, the U.S.' S&P 500 is trading around 6% higher over the same period.

"People are finally just waking up that, actually, the U.K. has a lot of fantastic companies and they are very cheap compared to other markets," Dan Boardman-Weston, CEO and CIO of BRI Wealth Management, told CNBC's "Squawk Box Europe" Monday.

He gave the example of oil giant Shell trading at a significantly lower price-to-earnings multiple than its U.S. rivals. A low P/E multiple — the ratio of a company's share price to its earnings per share — can indicate that a stock is undervalued.

Boardman-Weston said a number of reasons were driving U.K. stocks higher, including a period of relative political stability after a turbulent few years, and that "investors are just waking up to the fact it's cheap." He also cited a "marked increase" in the number of mergers and acquisitions over recent months.

It comes after private equity group EQT confirmed over the weekend that it is in advanced talks to buy video game services company Keywords Studios. EQT is offering £22.50 per Keywords share — a premium of over 70% from Friday's close of £14.70. Keywords' shares jumped more than 60% Monday morning following the news.

"It just shows how undervalued U.K. equities are, especially at that small and mid-cap end," Boardman-Weston said. "If an end buyer is willing to pay a 70% premium and they still think they can get the numbers to add up at that level, it just shows you