2 UK shares I’ve been buying this week

From a value perspective, UK shares look attractive. But two in particular have been attracting Stephen Wright’s attention over the last week.

| 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.

Compared to their US counterparts, UK shares typically trade at significant discounts. And that can be good for investors looking for stocks to consider buying. 

Finding value in the stock market is about more than price-to-earnings (P/E) multiples. But a couple of UK shares stand out to me as attractive for other reasons. 

Anglo American

The Anglo American (LSE:AAL) share price has been volatile in 2024. That’s mostly the result of takeover interest from BHP waxing and waning at various points.

Should you invest £1,000 in BAE Systems 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 BAE Systems made the list?

See the 6 stocks

Created with Highcharts 11.4.3Anglo American Plc PriceZoom1M3M6MYTD1Y5Y10YALL23 Nov 201923 Nov 2024Zoom ▾Jan '20Jul '20Jan '21Jul '21Jan '22Jul '22Jan '23Jul '23Jan '24Jul '242020202020212021202220222023202320242024www.fool.co.uk

While that doesn’t look to be on the cards (for now), the firm’s trying to divest its coal, platinum, and diamond units. This would leave its copper and iron ore divisions.

Focusing its operations in this way increases the risk of a downturn in copper prices. And this is especially significant with the US currently looking to focus on oil and gas over renewables.

There’s not much Anglo American or its shareholders can do about that. But the cash from divestitures should help offset short-term issues and I think the long-term outlook’s promising.

The company’s copper mines have relatively low production costs. And I think this is possibly the most important source of long-term differentiation for a commodities business.

That’s why I’ve been looking to add the stock to my portfolio. When the market-cap falls below £30bn, I think the company’s shares look like good value. 

JD Wetherspoon

The JD Wetherspoon (LSE:JDW) share price has fallen 13% over the last month. The main reason is the UK Budget presents challenges for the company, as well as the wider industry.

Created with Highcharts 11.4.3J D Wetherspoon Plc PriceZoom1M3M6MYTD1Y5Y10YALL23 Nov 201923 Nov 2024Zoom ▾Jan '20Jul '20Jan '21Jul '21Jan '22Jul '22Jan '23Jul '23Jan '24Jul '242020202020212021202220222023202320242024www.fool.co.uk

Higher Employer National Insurance and an increased National Minimum Wage should both increase the firm’s costs. And this isn’t good for a business focused on customer value.

I think however, the market’s overestimating the threat here. Importantly, the challenge isn’t just one for the company specifically, but for the hospitality industry as a whole. 

Having to increase its prices is unwelcome for JD Wetherspoon. But with other firms likely to have to do something similar, I expect it to be able to maintain its competitive position.

It’s easy to overlook the fact the business has been performing well lately. Sales have been increasing while a focus on cutting back on lease costs has caused margins and profits to rise. 

I’m not convinced the market‘s fully appreciating the strength of the firm’s competitive position. And that’s why I’ve been buying the stock for my portfolio. 

A common theme

Anglo American and JD Wetherspoon are very different businesses. But I think they’ve one thing in common, which is that their shares are good value from an investment perspective. 

From my perspective, that’s the most important thing. Value can manifest itself in different ways, whether it’s a potential divestiture or a strong long-term competitive position.

Owning both in my portfolio adds some welcome diversification. And if the share prices stay where they are, I plan on buying more in the future.

AI Revolution Awaits: Uncover Top Stock Picks for Massive Potential Gains!

Buckle up because we're about to dive headfirst into the electrifying world of AI.

Imagine this: you make a single savvy investment in some cutting-edge technology, then kick back and watch as it revolutionises entire industries and potentially even lines your pockets.

If the mere thought of riding this AI wave excites you and the prospect of massive potential returns gets your pulse racing, then you’ve got to check out this Motley Fool Share Advisor report – 'AI Front Runners: 3 Surprising Stocks Riding The AI Wave’!

And here’s the kicker – we’re giving you an exclusive peek at ONE of these top AI stock picks, absolutely free! How’s that for a bit of brilliance?

Get your free AI stock pick

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.

Stephen Wright has positions in Anglo American Plc and J D Wetherspoon Plc. 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

Mature Caucasian woman sat at a table with coffee and laptop while making notes on paper
Investing Articles

Here’s how a 40-year-old could start investing £100 per week to retire early

If a 40-year-old decides to start investing today, here's how they could potentially turn £100 a week into over £500k…

Read more »

A pastel colored growing graph with rising rocket.
Investing Articles

The FTSE 100 is up 60% in 5 years. Here’s why — and a big lesson!

The flagship FTSE 100 index has put in a very strong performance over five years. There's a specific reason for…

Read more »

Investing Articles

How much do investors need in an ISA to earn a £2,500 monthly passive income?

Charlie Carman explores how investors could strive for £30k in tax-free passive income each year from a dividend stock portfolio.

Read more »

Investing Articles

How much would a 45-year-old need to invest in an ISA to earn a £1k monthly passive income at 65?

Harvey Jones looks at how much an investor would need to put away every month to build a steady passive…

Read more »

Investing Articles

3 things to do ahead of the new 2025-26 ISA year

It's time for us all to put on our investing boots and get to work on developing our plans for…

Read more »

Older couple walking in park
Investing Articles

Is £150,000 enough to generate £1,000 a month in passive income?

Stephen Wright takes a look at three UK stocks with dividend yields above 8% that passive income investors might be…

Read more »

Investing Articles

Aim to earn a £50k second income in retirement by investing just this much each month

Even with a small monthly investment, it’s possible to earn a £50k second income with a successful investment strategy and…

Read more »

Man writing 'now' having crossed out 'later', 'tomorrow' and 'next week'
Investing Articles

Down 22% in a month! Is this my chance to buy shares in this FTSE 100 outperformer?

Shares in InterContinental Hotels Group have outperformed the FTSE 100 over the long term. So is a chance to buy…

Read more »