I think now’s a great time to go shopping for cheap UK stocks. The London Stock Exchange is packed with companies that can provide excellent shareholder returns regardless of broader economic conditions. This is why I have continued investing in UK plc despite problems like runaway inflation and the ongoing Covid-19 crisis.
Now is a particularly great time to go shopping for bargain lovers like me. The underperformance of British stocks versus their European and US counterparts in recent times provides an excellent buying opportunity. Here are two dirt-cheap UK shares I’m considering buying for my Stocks and Shares ISA right now.
Looking good
I believe that Lookers (LSE: LOOK) shares could be too cheap for me to miss. As well as trading on a forward price-to-earnings (P/E) ratio of 5.6 times, the retailer carries a meaty 4.1% yield for 2022.
I think the stratospheric rate at which electric vehicles are selling in Britain provides outstanding opportunities for Lookers. Sales of battery-powered and hybrid vehicles rocketed 17.9% year-on-year in October, the Society of Motor Manufacturers and Traders said. I expect demand to continue rocketing too as costs of producing these new-age vehicles steadily fall and concerns over the climate emergency inevitably grow.
I’m also encouraged by government plans to make it easier for EVs to be charged, a critical factor for car buyers to consider. From next year, all new homes and buildings in England will need to install EV charging points, it was announced today. It is thought this will boost the number of charging points being installed each year by 145,000.
But Lookers still faces the risk, like other car retailers, of uncertainty going into 2022 as supply chain issues continue to dent auto production.
A cheap UK share for an economic slump
Economic conditions in Britain are becoming increasingly alarming as soaring inflation and supply chain problems persist. Just today, EY Club slashed its GDP growth forecasts for 2022 by almost a full percentage point, to 5.6%. It warned of weak, sub-2% annual growth by the middle of the decade too.
Investors like me need to consider the threats and the opportunities a deteriorating UK economy creates. I am thinking of investing in Begbies Traynor Group (LSE: BEG). I think trading here will pick up as the number of corporate casualties might unfortunately soar from 2022. This cheap UK share provides financial rescue and recovery services for companies. It is also specialist in the field of corporate insolvencies for both businesses and individuals.
Today, Begbies Traynor trades on a forward price-to-earnings growth (PEG) ratio of just 0.5. This is comfortably inside the benchmark of 1 that suggests a stock could be undervalued. Moreover, the support business carries a handy 2.3% dividend for the financial year to April 2022 too.
I’d buy Begbies Traynor even though its penchant for acquisitions creates a myriad of risks, such as disappointing profits generation at a newly-acquired business.
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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.
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