£10k to invest! 2 cheap UK shares to buy today

Recent market volatility leaves plenty of British stocks trading on rock-bottom valuations. Here are a couple of cheap UK shares I’m looking to buy today.

| 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.

Happy young female stock-picker in a cafe

Image source: Getty Images

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.

I’m searching for the best cheap UK shares to buy following recent market volatility. Here are two I’d happily spend £10,000 on right now.

Vertu Motors

Sellers of luxury goods face significant uncertainty as the cost of living crisis worsens. But its my belief that car retailers like Vertu Motors (LSE VTU) will profit enormously from soaring demand for electric vehicles (EVs). And this makes the UK share a top buy for me for the near term and beyond.

It’s not just environmental concerns that are driving sales of low-carbon cars. Rocketing petrol and diesel prices — and their impact on customer wallets — are also boosting consumer interest.

A study by motoring consultancy New AutoMotive shows that the cost of running an EV is now 80% cheaper than a car with an internal combustion engine. The news comes as the cost of filling the tank of an average family car has passed £100 for the first time.

Data from the Society of Motor Manufacturers and Traders (SMMT) reveals how solid demand for EVs remains despite soaring inflation. Sales of new battery EVs jumped 17.7% year-on-year in May, latest data shows.

I worry that Vertu Motors faces the prospect of empty showrooms as the car industry faces ongoing production issues. However, the business is enjoying better margins on its new and used vehicles due to tighter supply, reducing a lot of the danger to profits.

Besides, I think that Vertu’s ultra-cheap share price reflects the risks it faces today. At 57.9p per share, the retailer trades on a forward price-to-earnings (P/E) ratio of just 7.7 times.

Vertu’s dividend yield also clocks in at a handy 3.2% at current prices, providing an added bonus.

The Berkeley Group

I already own a couple of FTSE 100 housebuilders in my portfolio. And I’m considering adding The Berkeley Group (LSE: BKG) to the set as the housing market keeps steaming ahead.

Rising interest rates pose a dangers to buyer affordability — and thus newbuild demand — looking ahead. So does the deteriorating UK economy which threatens to damage market confidence.

At the moment though, house prices continue to rise at breakneck speed. And it encourages me to believe that Berkeley and its peers should continue to enjoy handsome earnings growth. Latest data from Halifax shows the average property price in the UK rose 10.5% in May.

I like Berkeley in particular because of its focus on the more economically-stable regions of London and the South East. Official data this week showed that the capital’s economy (along with Northern Ireland) is now back above pre-pandemic levels while other regions struggle.

Finally, Berkeley offers excellent value for money right now. The housebuilder trades on a forward P/E ratio of 10.7 times. It also offers a 5.6% dividend yield at current prices of £42.30 per share. I think this is a top FTSE 100 share for me to buy today.

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 recommended Vertu Motors. 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

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 »

Growth Shares

As the boohoo share price falls, could it become a penny stock in 2025?

Jon Smith outlines some of the recent problems involving the boohoo share price and considers if things could get even…

Read more »

Young Asian woman with head in hands at her desk
Investing Articles

Here are the worst-performing FTSE 100 shares over the last 5 years

These five FTSE 100 shares have been complete duds over the last half decade. But is there potential for a…

Read more »

Investing Articles

Nvidia stock has tripled this year! Can it keep rising?

Nvidia's latest sales update showed strong growth and the stock's been on a tear so far in 2024. So is…

Read more »