When looking for UK stocks to buy, I like to focus on cheap stocks. This is because, according to research, buying cheap stocks can lead to high returns in the long run.
However, this is not always guaranteed. Therefore, this strategy is not suitable for all investors.
Still, I’m happy with the level of risk and research needed to find the right type of business. And with that in mind, there are two cheap UK stocks to buy for my portfolio today.
Cheap UK stocks
The first company on my list reach (LSE: RCH)..Publishers with a wide selection of titles, including mirror And Daily Express Newspapers are navigating difficult operating environments.
Newspaper sales were already declining before the pandemic, and this trend has only accelerated over the last 12 months. But the reach hasn’t stood yet. The company has invested heavily in online operations. As a result, the sector is growing rapidly, offsetting some of the decline in the newspaper business.
According to the company Latest transaction updatesIn the first four months of 2021, digital revenue increased 35%, while total print revenue fell 10.4% and circulation fell 7.9%. Overall revenue fell by only 3.1% thanks to the booming digital business.
Reach is aiming for further growth. The number of registered sites at the end of April was 6.2 million, and we hope to increase it to 10 million by 2022. We are also reducing costs to improve profitability.
Based on the current city growth forecast, price-earnings ratio (P / E) is trading in multiples of 6.9. Even after considering all the issues of the company It looks cheap to me..
Therefore, I buy Reach as part of a basket of cheap UK stocks, even though the company faces significant challenges due to reduced print revenue.
Rising house prices
Buy Challenger Bank as well as Reach OSB (LSE: OSB) For my portfolio of cheap UK stocks. This company specializes in mortgages, especially buy-tourt mortgages.
Borrower demand has been strong for the past 12 months, thanks to the strong UK housing market. Underlying net loans increased by 3% to £ 19.6 billion in the three months to March 31, according to the company’s latest renewal. Throughout the year, city analysts believe the group will report about 30% revenue growth.
Based on these forecasts, stocks are traded on less than 8 futures P / E. I think this multiple looks cheap.
The company also promises to pay 25% of its earnings as dividends. So, based on this, this year’s stock yield could be 3.8%, which is just a forecast at this point.
The most serious risk faced by lenders is the threat of a downturn in the housing market. This can start with a rise in interest rates, which can lead to bad debt losses at banks. In this scenario, OSB may need to revisit its dividend plan. Earnings may also be lower than expected, leading to a decline in stock prices.
Still, even after considering these risks, I buy lenders today for a portfolio of cheap UK equities.
If the CEO of a company owns 12.1% of the shares, I think that’s usually a very good sign.
But with this opportunity, it could be even better.
At the age of 55, he sees new “Uber-style” technology opportunities.
And this isn’t a small tech startup full of empty promises.
This extraordinary company is already one of the largest in the industry.
Last year, revenue reached a whopping £ 1.132 a billion.
The board recently announced a 10% dividend increase.
And It was a great Motley Fool income pick for the ninth year in a row!
But even so, we still believe that there may be great adversity.
Obviously, the founder and CEO of this company agrees.
Rupert Hargreaves does not have a position in any of the listed shares. The Motley Fool UK does not have a position in any of the listed shares. The views expressed about the companies mentioned 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 exploring different insights, Better investors than us.
Two Cheap UK Stocks To Buy Today-The Motley Fool UK
https://www.fool.co.uk/investing/2021/05/16/2-cheap-uk-shares-id-buy/ Two Cheap UK Stocks To Buy Today-The Motley Fool UK