Business & Investment

Need to buy these two cheap UK stocks in September?

Safe Store Holdings (LSE: Safety) It’s a cheap UK stock that I’m paying attention to right now. In fact, I’m thinking of buying in anticipation of another solid transaction update on Tuesday, September 7th.

City analysts say the demand for self-storage space is skyrocketing in the UK Safe store It will increase by 35% in this fiscal year. resulting in, FTSE 250 The company trades at a price-earnings ratio (PEG) of 0.9. Recall that readings less than 1 suggest that the stock may be undervalued by the investment community.

There are many reasons why the UK self-storage industry is growing so fast. This requires a strong housing market, people who need additional storage space to carry out DIY projects, space to store inventory when starting e-commerce and when stores perform social distance measurements. Includes companies that do.

Still, there is still plenty of room for growth in the domestic self-storage industry. The Self-storage Association states that the UK has only 0.68 square feet of storage space per capita. This is well behind the 9.4 square foot space recorded in the United States. And Safestore is expanding rapidly to take full advantage of this opportunity. According to the latest financial information, the business saw a 11.1% surge in revenue in the six months to April.

If the economic recovery continues to stagnate, demand for safestore storage units may begin to decline. But I think the ultra-low PEG ratio of this cheap UK stock is more than a reflection of this potential threat.

Another cheap UK share on my buy list?

I don’t want to buy De La Rue (LSE: DLAR) However, September stocks. This is even after considering that money printers will be trading at a forward PEG ratio of only 0.1, with the expected recovery of more than 300% this year.

De La Rue’s turnaround strategy, a money and passport printer, is currently rippling. With lower costs, companies are spending cash on fast-growing business areas. De La Rue has doubled its ability to print polymer banknotes to take advantage of the surge in demand for plastic-based cash. We are also investing heavily in the technology of the certification sector, which is part of a business that is growing steadily as the fraud problem worsens.

That said, I’m still worried about De La Rue’s long-term future as our increasingly “cashless” society casts a shadow over the company’s core business. The Covid-19 emergency hastened the loss of physical money as people have sought to minimize the risk of infection. And the legislature is taking steps to make it easier to buy things without cash.Today, for example, the British government announced Raised the limit for contactless payments From October to £ 100.

Change customer habits regarding face-to-face payments and increase investment in payment technology by banks and technology giants such as: Apple And Google is partnering with the rapid rise of e-commerce, all creating great risks for De La Rue to overcome. Some argue that these risks are incorporated into the earnings multiples of this cheap UK stock. But for me, small cap companies are too risky.

Royston Wild There are no positions in any of the listed shares. Motley Fool UK owns a stake in Apple and recommends Apple. Motley Fool UK recommends De La Rue and recommends the following options: A long $ 120 call to Apple in March 2023 and a short $ 130 call to Apple in March 2023. The views expressed about the companies in this article are those of the author and may differ from the official recommendations made by subscription services such as Share Advisor, Hidden Winners, and Pro. Here at The Motley Fool, by examining different insights, Better investors than us.

Need to buy these two cheap UK stocks in September? Need to buy these two cheap UK stocks in September?

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