I’m searching for the best cheap UK shares to buy today. Here are three sub-£4 stocks I’m considering snapping up.
Playing the e-commerce explosion
I’d buy Wincanton (LSE: WIN) shares to try and make big money from the e-commerce boom. City analysts are predicting solid and sustained earnings growth at the warehouse and distribution services provider as online activity rises and parcels volumes increase.
Current consensus suggests bottom-line rises of 10% and 12% for the next two fiscal years are due. I find these forecasts particularly attractive as they leave the business trading on a forward price-to-earnings (P/E) ratio of just 10 times.
Wincanton is making great progress in exploiting the etail boom and last week it announced revenues increased 19% during the six months to September. Also last week, the logistics giant said it had inked a major contract with ABF-owned Primark that’ll see it make 50,000 deliveries over five years.
Even though driver shortages are creating a problem today, I think this cheap UK share is a great long-term buy.
DIY MVP
Sticking with the W’s, Wickes Group (LSE: WIX) is another ultra-cheap British stock on my shopping list today. Trade is booming here as a strong housing market and soaring home improvement spending catapults demand for its DIY products. Latest financials in October showed like-for-like sales up 16.9% in the September quarter versus the same three months in 2019.
Okay, comparable sales were down 1.6% year-on-year. But I think this was a solid result, given the strong results a year earlier when people spent abnormal amounts of time decorating their homes during Covid-19 lockdowns.
My main concern is not whether DIY spending will continue growing robustly as the decade progresses. It’s that the likes of Wickes face increasing cost pressures that are damaging profit margins.
Still, at current prices, I believe the retailer is hard to ignore. City analysts think earnings here will leap 21% and 41% in the next two fiscal periods respectively. As a result, Wickes trades on a forward price-to-earnings growth (PEG) ratio of 0.8.
Here comes the sun
I also think getting in on the green energy revolution is a good idea as demand for low-carbon electricity soars. This is why I’d buy Foresight Solar Fund Limited (LSE: FSFL), an investment company that invests in solar farms in the UK, Spain and Australia.
Foresight Solar’s collection of solar PV assets isn’t the only reason I like this cheap UK share however. The former penny stock also owns a 50% stake in the Sandridge Battery Storage after acquisition action in the spring.
This represented the company’s first foray into the battery storage market and more action on this front can be expected. Battery storage assets are essential in letting power suppliers balance energy supplies, and they play a critical role in the fast-growing renewables sector. I’d buy Foresight Solar despite the huge costs it incurs to keep its solar farms running.
Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Associated British Foods and Foresight Solar Fund Limited. 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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