2 dirt cheap FTSE 250 shares and an ETF to consider in September!

Searching for great stocks to fit into a value portfolio? These cut-price FTSE 250 shares might just be what investors have been looking for.

| 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.

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.

Demand for FTSE 250 shares has risen sharply in 2024 thanks to the improving UK economic outlook. This pickup probably isn’t a surprise. Around 60% of the index’s earnings come from Britain.

The UK’s second-most-prestigious index has consequently risen around 7% in value in the year to date, pushing valuations higher. But don’t be mistaken, there are still many great bargains for investors to go hunting for.

Buying cheap shares has two significant advantages. Undervalued stocks can deliver stunning capital appreciation over time as the market wises up to their cheapness and share prices soar.

Should you invest £1,000 in Bank of Georgia right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Bank of Georgia made the list?

See the 6 stocks

Value shares also provide investors with a margin of safety. If a company suddenly experiences adverse conditions, the scale of share price losses can be far more limited.

With this in mind, here are two cheap FTSE 250 shares to consider buying today. I’ve also taken a look at a value-focused exchange-traded fund (ETF), which could be an effective way for investors to manage risk.

Solar star

The threat of higher-than-normal interest rates means property and infrastructure companies like NextEnergy Solar Fund (LSE:NESF) remain ultra cheap.

This particular investment fund — which owns more than 100 renewable energy assets mainly in the UK — trades at a 20.2% discount to the estimated value of its assets.

With it also carrying a huge 10.5% forward dividend yield, I think it’s too cheap to ignore.

While they’re not without risk, renewable energy stocks like this have terrific long-term potential. As the climate emergency worsens, demand for their power should rapidly increase. This makes NextEnergy worth serious consideration, and especially at current prices.

Bank on great value

Bank of Georgia Group (LSE:BGEO) offers an excellent blend of low earnings multiples and bulging dividend yields.

For 2024, the emerging markets bank has a price-to-earnings (P/E) ratio that sits at 3.6 times. Its price-to-earnings growth (PEG) ratio of 0.1 sits comfortably inside the value benchmark of 1 and under. Finally, its forward dividend yield’s 6.5%.

Bank of Georgia shares carry more risk than usual as civil unrest in the country picks up. But I think the potential benefits of owning the FTSE 250 share may well outweigh the dangers.

This was underlined by recent financials that showed adjusted pre-tax profit up 11% in the second quarter. Banking product demand continues to soar as Georgia’s economy rapidly grows.

A top ETF

Investing in a value-focused ETF can carry fewer risks than buying individual stocks like those above. I’ve opened a position in the Xtrackers MSCI World Value UCITS ETF (LSE:XDEV) in recent sessions.

This fund — which tracks the performance of the MSCI World Enhanced Value Index — provides exposure to 400 large-to-mid-cap companies in 23 developed countries. As the graphic below shows, it gives investors a high level of diversification.

Breakdown of the MSCI World Enhanced Value Index.
Source: MSCI

With an annual fee of 0.25%, this Xtracker fund’s one of the cheapest of its kind too.

Exposure to tech stocks like Cisco Systems and Intel could see it outperform during tough economic times. But, on balance, I think this will prove to be a top stock to own over the long term.

But this isn’t the only opportunity that’s caught my attention this week. Here are:

5 Shares for the Future of Energy

Investors who don’t own energy shares need to see this now.

Because Mark Rogers — The Motley Fool UK’s Director of Investing — sees 2 key reasons why energy is set to soar.

While sanctions slam Russian supplies, nations are also racing to achieve net zero emissions, he says. Mark believes 5 companies in particular are poised for spectacular profits.

Open this new report5 Shares for the Future of Energy — and discover:

  • Britain’s Energy Fort Knox, now controlling 30% of UK energy storage
  • How to potentially get paid by the weather
  • Electric Vehicles’ secret backdoor opportunity
  • One dead simple stock for the new nuclear boom

Click the button below to find out how you can get your hands on the full report now, and as a thank you for your interest, we’ll send you one of the five picks — absolutely free!

Grab your FREE Energy recommendation now

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 positions in Xtrackers (ie) Public - Xtrackers Msci World Value Ucits ETF. 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.

Pound coins for sale — 51 pence?

This seems ridiculous, but we almost never see shares looking this cheap. Yet this recent ‘Best Buy Now’ has a price/book ratio of 0.51. In plain English, this means that investors effectively get in on a business that holds £1 of assets for every 51p they invest!

Of course, this is the stock market where money is always at risk — these valuations can change and there are no guarantees. But some risks are a LOT more interesting than others, and at The Motley Fool we believe this company is amongst them.

What’s more, it currently boasts a stellar dividend yield of around 8.5%, and right now it’s possible for investors to jump aboard at near-historic lows. Want to get the name for yourself?

See the full investment case

More on Investing Articles

Investing Articles

£5,000 invested in Tesco shares 2 years ago is now worth…

Over the last two years, Tesco shares have provided investors with gains of around 30% per year when dividends are…

Read more »

Investing Articles

Closing in on £6.50, Rolls-Royce’s share price still looks cheap to me anywhere under £9.32

Rolls-Royce’s share price has gained a lot of ground in the past year or so, but with strong growth and…

Read more »

British flag, Big Ben, Houses of Parliament and British flag composition
Value Shares

The best performing stock in the FTSE 100 over the last 5 years is…

This under-the-radar FTSE stock has surged over the last five years, outperforming the majority of shares in the large-cap index…

Read more »

Passive income text with pin graph chart on business table
Investing Articles

Just £5 saved and invested a day in this FTSE 100 dividend gem could make £11,698 a year in passive income over time!

Despite a common belief to the contrary, even a small investment regularly made can result in big passive income from…

Read more »

Abstract bull climbing indicators on stock chart
Investing Articles

Down 9% despite rising gas demand forecasts and new deals done, Shell’s share price looks a bargain to me

Although it has recovered somewhat since December, Shell’s share price still looks very undervalued to me, particularly in light of…

Read more »

Stack of British pound coins falling on list of share prices
Investing Articles

£10,000 invested in Tesla stock on 18 December is worth this much today!

£10,000 invested into Tesla stock five years ago would be worth around £60,000 today. But something nasty has happened to…

Read more »

Investing Articles

What should I buy next in my Stocks and Shares ISA?

A recent sale means Stephen Wright can buy more for his Stocks and Shares ISA. Here are some of the…

Read more »

Close-up of British bank notes
Investing Articles

Here’s how compounding is the key to Stocks and Shares ISA growth

Should we take out our Stocks and Shares ISA income each year, or reinvest it in more shares? The difference…

Read more »