I’m on the hunt for the best cheap UK shares to buy following recent market volatility. Here are two I’m considering snapping up after heavy share price falls.
Motorpoint Group
Retailers of all kinds face extreme peril as the cost of living crisis worsens. Evidence that Britons are cutting back even on essential goods should come as a warning to all UK retail shares.
However, it’s my belief that Motorpoint Group (LSE: MOTR) could still be a top stock to buy right now. I think the used car retailer could benefit hugely from shoppers switching from new to cheaper pre-owned cars.
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I also think Motorpoint could thrive if electric vehicle (EV) sales continue to explode. According to the Society of Motor Manufacturers are Traders (SMMT), sales of pre-owned battery EVs soared 120.2% year-on-year in the first quarter.
Prices of petrol and diesel continue to rocket as the Ukraine war goes on. And so cash-strapped drivers will have greater incentive to buy more cost-effective cars from the likes of Motorpoint. The RAC warned last week that petrol might soon be commonly selling for 200p a litre.
I’d use Motorpoint’s recent share price decline as a chance to pick up a bargain. I think long-term earnings here could balloon as environmental and financial concerns drive a mass shift to EVs.
SSE
The SSE (LSE: SSE) share price has risen strongly in 2022 as investors have sought out safe-haven shares. Electricity producers like this can, of course, expect demand for their services to remain strong at all points of the economic cycle.
However, SSE’s share price has slumped from record highs in recent weeks. This is due to news that the government will impose a windfall tax on energy producers to offset leaping oil prices. Renewable energy stocks like SSE are in danger of taking a big financial hit alongside fossil fuel producers.
Still, at current prices of £17.60 per share, I believe SSE could be too cheap to miss. The FTSE 100 firm trades on a forward price-to-earnings growth (PEG) ratio of just 0.9. A reading below 1 suggests a stock is undervalued.
On top of this, SSE’s prospective dividend yield sits at a very healthy 5.1%.
Investing in heavily-regulated businesses like SSE can often be problematic. And especially when people are struggling with everyday costs (as the introduction of the windfall tax illustrates). It’s possible that discussions capping dividend levels at firms like these could return soon too.
However, as things stand today, I think SSE is a great share for me to buy. I like its excellent defensive qualities which provide me as an investor with peace of mind. And I think the huge sums it is investing in renewable energy over the next decade could deliver excellent shareholder returns as action against climate change speeds up.
