Dirt-cheap UK shares I’d buy ahead of the stock market recovery

first_imgDirt-cheap UK shares I’d buy ahead of the stock market recovery Are you on the lookout for UK growth stocks?If so, get this FREE no-strings report now.While it’s available: you’ll discover what we think is a top growth stock for the decade ahead.And the performance of this company really is stunning.In 2019, it returned £150million to shareholders through buybacks and dividends.We believe its financial position is about as solid as anything we’ve seen.Since 2016, annual revenues increased 31%In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259Operating cash flow is up 47%. (Even its operating margins are rising every year!)Quite simply, we believe it’s a fantastic Foolish growth pick.What’s more, it deserves your attention today.So please don’t wait another moment. Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Rupert Hargreaves 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. FREE REPORT: Why this £5 stock could be set to surge Rupert Hargreaves | Monday, 1st March, 2021 | More on: BDEV PSN TW Image source: Getty Images See all posts by Rupert Hargreavescenter_img Our 6 ‘Best Buys Now’ Shares Enter Your Email Address I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Get the full details on this £5 stock now – while your report is free. Simply click below to discover how you can take advantage of this. I believe as the UK economy comes out of lockdown, we’ll see a stock market recovery as well. As such, I’m looking for dirt-cheap UK shares to buy to capitalise on this recovery. Of course, this is just my opinion, and there’s no guarantee we’ll see either an economic or a stock market recovery over the next few weeks and months. Dirt-cheap UK sharesOne sector where I believe there’s plenty of value to be found right now is the UK homebuilding sector. With that in mind, I’d buy housebuilders Barratt Developments (LSE: BDEV), Persimmon (LSE: PSN) and Taylor Wimpey (LSE: TW) for my portfolio to capitalise on the stock market recovery.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…The UK housing market is structurally undersupplied. This is driving up home prices, and it’s unlikely to change anytime soon. Despite government policies to encourage homebuilding, strict planning regulations and population growth are two headwinds preventing builders from meeting rising demand. As well as these factors, government initiatives such as the Help to Buy scheme and low-interest rates have helped push prices higher. However, past performance should never be used as a guide to future potential. So, while home prices have risen almost continually for the past few decades, there’s no guarantee this trend will continue indefinitely. Despite the factors outlined above, a sudden financial crisis or boom in house construction could send the market lower. Stock market recovery I think Barratt, Persimmon and Taylor Wimpey are all well-placed to navigate these risks. All three also concentrate on the lower end of the housing market where demand is greatest.For example, in 2020, Taylor’s average selling price was £288k, Persimmon’s was £230k and Barratt’s was £284k. This end of the market has been much more resilient throughout the economic cycle in the past than higher-end properties. That said, this hasn’t been the case over the past 12 months. Research shows properties costing more than £1m outperformed the rest of the market in 2020. This illustrates both the risks and opportunities these businesses face.  Despite these challenges, government forecasts suggest the UK will need at least 300,000 new homes every year. As some of the largest housebuilders in the country, I think Barratt, Persimmon and Taylor Wimpey will benefit from this demand. Also, they’ve all shown a willingness to distribute large amounts of cash to investors when times are good. City analysts have pencilled in dividend yields of 3.7%, 9% and 5% respectively in 2021. These projections look attractive compared to the current interest rate environment.Nevertheless, they’re only projections at this point. There’s no guarantee any of the three companies will meet these targets. If the economy deteriorates further, they may even skip dividend payments altogether.Overall, despite the risks they face, I’d buy shares in Barratt, Persimmon and Taylor Wimpey as a way to capitalise on a potential stock market recovery over the next few months.last_img read more

IPE Views: Steeling for a battle over pensions

first_imgIt’s questionable whether such a step would be possible, or appropriate, in the case of a private sector company, as it could amount to state aid. However, the other possibility would be for BSPS to fall into the Pension Protection Fund (PPF), a move that already has some precedent when one of the UK’s other traditional industries, coal, encountered problems.The two industry-wide funds associated with the coal industry entered the lifeboat fund as part of a wide-ranging restructure of its sponsor in an attempt to keep coal mining viable in the UK. As part of the agreement to sever ties with its sponsor, UK Coal, the funds were granted a controlling stake in a new property venture. But attempts to keep the industry viable were scotched by a later fire in one of the remaining coal pits. So the absorption of the BSPS into the PPF would not be without precedent, but for the Pensions Regulator (TPR) to agree to such a move, Tata would likely need to offer a reasonable (and costly) settlement to the trustees.The trustee board has so far remained quiet about Tata’s selling out of the UK, only saying that it would expect the company to “discuss […] the implications” of any sale or restructuring. The government must now proceed carefully. TPR’s independence must be preserved, and no impression must be given that either the regulator or the PPF were asked to agree to a deal that is detrimental to those already within the PPF.While the PPF is currently well-funded, and last March reported a £3.6bn surplus, the desire to keep an ailing industry open and avoid the significant unemployment that would come with the collapse of the UK steel industry, must not lead to an outcome that looks like a sponsor dumping its pension obligations – precisely a scenario the current regulatory framework is meant to avoid. With the collapse of the UK steel industry a distinct possibility, Jonathan Williams looks at the future of the British Steel Pension FundAs the UK faces the prospect of its steel industry winding down, attention has focused not only on the possibility of a temporary nationalisation of some of the assets owned by Tata Steel but also on the fate of the British Steel Pension Scheme (BSPS), sponsored by Tata. With £14bn (€19bn) in assets this time last year, BSPS was among the UK’s larger pension funds – and hardly in a unique position that it was reporting a deficit. It is this shortfall – £553m on an ongoing basis in 2011 and up to nearly £1.2bn by 2013 – that means the scheme will play a material part when it comes to settling the future of steel manufacturing in the UK.Commentary in recent days has remarked that Tata’s UK business is a pension fund producing steel, often used when pension obligations are viewed as overwhelming. This perception – however mistaken it may be when part of the funding difficulties are simply down to the low-interest-rate environment – has led to suggestions the government should take on responsibility for the pension fund, including from former secretary of state for business Vince Cable.Cable’s intervention is notable. It was under his tenure the UK government took on the majority of the liabilities associated with Royal Mail, in an attempt to make the company more attractive to private investors ahead of its flotation in 2013. The listed company was left with a significantly scaled-back pension liability and a pension fund now firmly in surplus, while the remaining pensions owed are now simply part of government expenditure.last_img read more