Buying ultra-cheap UK shares can be a frightening experience. It’s never fun watching stocks see-saw in value. And this can be a common problem with low-cost stocks.
However, such volatility doesn’t hamper my appetite for cheap British stocks. I invest according to the returns I expect to make over a long time horizon, say a decade or more. Over this sort of timescale the very best stocks tend to sail through such choppiness and deliver mighty shareholder profits.
Here are three great-value stocks I think could help me do just that.
A cheap UK healthcare share
I’m thinking of investing in some choice healthcare shares to give my portfolio a bit more robustness. And Totally (LSE: TLY) is one low-cost medical stock I’m running the rule over right now. This business provides urgent care services in partnership with the NHS. These include the NHS 111 emergency phone line and a raft of urgent care centres across Britain.
Like many other healthcare shares, demand for Totally’s services remain strong at all points of the economic cycle. As an investor, this provides me with exceptional peace of mind. My only concern with buying this business is the constant threat that changes to health spending by the government might hit the level of new contracts and contract extensions it receives.
A counter-cyclical champion
Worsening economic conditions in Britain suggests to me that Begbies Traynor Group (LSE: BEG) could be an attractive buy today. This dirt-cheap UK share provides financial rescue and recovery services and is a specialist in the insolvency field. Naturally, trading is likely to suffer when the economy picks up again. But, for the time being, industry conditions look very favourable.
According to the Insolvency Service, the number of UK insolvencies leapt 17% quarter-on-quarter between July and September. This was driven by the number of company voluntary liquidations hitting their highest quarterly total since 2009.
I wouldn’t just buy Begbies Traynor for the short term however. I think its appetite for acquisitions could deliver excellent profits growth over the longer term too.
Raise a glass
Breakneck sales growth over at Virgin Wines (LSE: VIP) have caught my attention too. Revenues at the online wine business have rocketed 30% year-on-year during the past two fiscal years. Not only is the business reaping rewards from the broader e-commerce explosion. It’s also benefitting from soaring demand for wine in the UK.
The experts at Statista think wine sales will continue growing strongly too. They forecast annualised growth of 13.2% through to 2025. I like Virgin Wines’ excellent customer proposition, its broad selection of wines, and the exclusive agreements it’s signed with many a winemaker. This guarantees repeat business from a customer than loves a particular bottle.
Though do remember that the retailer still faces considerable threat from supermarkets and other specialised players like Majestic Wine.
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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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