2 dirt-cheap stocks to buy, including a top FTSE 100 share!

I’m searching for the best cheap stocks that my money can buy right now. Here are two top shares (including one from the FTSE 100) I’m considering purchasing.

A top cyber security share

The amount that businesses, governments and other organisations are spend on cybersecurity is soaring. British government data released this week showed that 1,800 UK tech firms created total annual revenues of £10.1bn in 2021. This was up 14% year-on-year.

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NCC Group (LSE: NCC) is one company that’s benefiting from this rapidly-expanding market. Latest financials showed revenues up 7.2% in the six months to November at constant currencies (and excluding its recent acquisition of Iron Mountain’s IPM business).

Cybersecurity-related expenditure isn’t just soaring in Britain, of course. Electronic attacks are a global problem and NCC’s broad geographic footprint is allowing it to exploit this booming market to the full. The e-warfare specialist operates in Europe, North America and Asia Pacific, and it’s taking steps to boost its overseas business too. Indeed, the $220m IPM acquisition last July gives it vastly better scale in North America.

A cheap UK tech stock

NCC provides a wide range of security and risk mitigation services to organisations. From providing protection from cyber attacks and security assessments to drawing up software escrow agreements, the tech giant’s operations are essential as the digital revolution takes off.

My only concern for NCC is the ever-present threat of systems failure. This could have a significant impact on the company’s reputation and by extension on future sales. That said, I still think this cheap UK stock’s low price makes it an attractive stock for me to buy.

City analysts think NCC’s earnings will rise 20% and 14% in the next two financial years (to May 2022 and 2023 respectively). As a result, the company trades on a price-to-earnings growth (PEG) ratio of just 0.8. Any reading below 1 suggests that a stock could be undervalued.

A FTSE 100 stock to buy

On paper it seems that Ferguson’s (LSE: FERG) shares also offer terrific value today. Forecasters think earnings at the plumbing, heating and air conditioning specialist will jump 20% this financial year (to July 2022) and by an extra 6% next year. This leaves it dealing on a forward PEG ratio of 0.9.

I like Ferguson as it generates 95% of its profits from the US. Its massive exposure to the world’s biggest economy could help it to generate large profits as the post-pandemic recovery continues. In particular, residential construction rates look set to rise strongly, while President Biden’s $550bn infrastructure spending bill could boost non-residential building too.

It’s worth remembering that rising interest rates could cause some turbulence for Ferguson’s profits. New housing projects dropped 4.1% in January, which some believe could reflect recent action by the Federal Reserve. That said, as a long-term investor I still think this FTSE 100 share has a lot to offer me. And especially as it rapidly grabs market share from its competitors.

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended NCC. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

This post was originally published on Motley Fool

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