3 cheap UK shares to buy

These three cheap UK shares have caught my attention recently. Here’s why I think they could be some of the best British stocks to buy in June.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Today, I’m looking at three cheap UK shares I think could be too good to miss.

#1: Riding the construction boom

Soaring construction activity in Britain is setting building services group TClarke (LSE: CTO) up for strong earnings growth. City analysts think annual earnings here will rocket 50% in 2021 and 37% next year.

This leaves the company trading on a forward price-to-earnings growth (PEG) ratio of just 0.2. A reading below 1 suggests a UK share could be undervalued by the market.

New order volumes across the construction sector grew at their fastest rate in May since records began in 1997, IHS Market said last week. It’s an uptick which Tclarke, which provides a broad range of services across the industry, is well-placed to gain from.

Remember though, this cheap UK share’s operations are highly cyclical. And so a fresh downturn in the domestic economy could blow those upbeat forecasts wildly off course.

#2: An emerging market star

I reckon value hunters like me should give TBC Bank Group (LSE: TBC) a close look today. The FTSE 250 firm is expected to record an 81% earnings uplift this year, resulting in a forward PEG multiple of 0.1.

On top of this, the cheap UK share sports a monster 4.2% dividend yield. It’s a reading that smashes the broader 3.5% forward average for British shares.

Hand holding pound notes

TBC Bank’s a great way to ride the strong rebound in Georgia, an emerging market economy which has experienced stunning growth in recent years.

Indeed, just last week, the government there hiked its 2021 GDP growth estimate to 6.5%. It’s tipping growth of 6.9% in 2022 too.

Pleasingly for TBC Bank and its peers, Georgia’s central bank has undertaken a series of interest rate hikes in 2021. This widens the difference between what financial services firms can offer borrowers and savers, thus boosting net interest margins.

But be aware that a fresh uptick in the Covid-19 crisis could see rates slashed again in a bid to support the Eurasian nation’s economy.

#3: Another cheap UK dividend share

I think Sylvania Platinum (LSE: SLP) also offers tremendous value at current prices. Not only does this precious metals miner trade on a forward PEG ratio of below 0.1, but City brokers also expect dividends to keep growing as earnings are tipped to rocket (a 174% bottom-line rise is currently forecast). Thus, the cheap UK share boasts a 4.6% dividend yield.

I like Sylvania because prices of its metals are benefitting from extreme investor jitteriness during this economic recovery. The World Platinum Investment Council recently announced that the platinum market remained in deficit during the first quarter “as strong industrial, automotive and jewellery demand and sustained investment demand for platinum outstripped recovering but constrained supply.”

It’s true that mining metals can be fraught with massive operational risks that could hit revenues and cause costs to balloon. But I still think Sylvania could be considered too cheap to miss at current prices.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

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.

More on Investing Articles

Petrochemical engineer working at night with digital tablet inside oil and gas refinery plant
Investing Articles

Is now the time to buy BP shares? Here’s what the charts say

The best time to buy shares in a company is when they’re trading at a discount. But the future is…

Read more »

Investing Articles

Here’s how I’d use £50K to aim for a million when the stock market crashes

Seeing a stock market crash as a buying opportunity could prove lucrative for a well-prepared, long-term investor. Christopher Ruane explains…

Read more »

Stack of one pound coins falling over
Investing Articles

It’s up 27% with a P/E of 9! I’m considering the potential of this blossoming penny stock

Despite several years of losses, this UK penny stock has an impressive valuation. I’m looking to see if it could…

Read more »

US Stock

The Nvidia share price falls! Here’s what I think happens next for the S&P 500

Jon Smith reviews the overnight results from Nvidia and explains why this could stall the S&P 500 performance through to…

Read more »

Investing Articles

Down 15% today, is this FTSE 100 share too cheap for me to miss?

JD Sports' share price has tanked after the FTSE 100 share released another profit warning. Is this the opportunity I've…

Read more »

Investing Articles

Up 8% today, is this FTSE 100 growth stock a slam-dunk buy for me?

Halma's share price is soaring thanks to another headline-grabbing trading update. Is the FTSE 100 stock now too good for…

Read more »

Investing Articles

With a P/E ratio of just 10.5 is now a brilliant time to buy a cut-price FTSE 250 tracker?

Harvey Jones says a recent dip in the FTSE 250 leaves the index trading at bargain levels. One stock in…

Read more »

Warren Buffett at a Berkshire Hathaway AGM
Investing Articles

To build a passive income flow, I’d follow this Warren Buffett approach

Warren Buffett has set up passive income streams most people can only dream about. Our writer sees some practical lessons…

Read more »