These bargain shares are on offer! I’d grab these future profits now

This Fool explains why now could be a great time to snap up these bargain shares before the market starts to make a recovery.

| 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.

Portrait Of Unhappy Woman At Home With Computer Victim Of Online Crime

Image source: Getty Images

There are plenty of bargain shares on offer in the current market. However, some of these stocks have all the hallmarks of classic value traps.

With that in mind, here are three bargains shares that look to be on offer right now with the financial firepower to survive the coronavirus crisis.

Inflation Is Coming

Inflation is out of control, and people are running scared. But right now there’s one thing we believe Investors should avoid doing at all costs… and that’s doing nothing. That’s why we’ve put together a special report that uncovers 3 of our top UK and US share ideas to try and best hedge against inflation… and better still, we’re giving it away completely FREE today!

Click here to claim your copy now!

Bargain shares to buy

As bargain shares go, Investec (LSE: INVP) stands out. The asset manager looks cheap on all metrics. It is currently dealing at a price-to-earnings (P/E) ratio of just 3 and a price-to-book (P/B) multiple of 0.4. That implies the whole business is worth 150% more than the current share price.

Further, shares in the asset management and banking group are dealing at an EV/EBITDA multiple of 1.4. For some comparison, the rest of the investment banking and services industry is trading at an EV/EBITDA multiple of 10. This gives the stock a wide margin of safety at current levels.

Put simply, Investec looks like a bargain. What’s more, the company is highly liquid and well capitalised according to its recent trading statements.

With a potential upside of more than 100% when investor confidence returns, it could be worth taking a closer look at this bargain share before the rest of the market catches on.

A return to growth

Another one of the bargain shares that have recently caught my eye is Capita (LSE: CPI). Capita has been struggling to turn itself around over the past few years, and analysts were expecting the group’s recovery to really take hold in 2020.

However, the coronavirus crisis has set the group back. In a trading update at the end of March, the company announced that while it operates a range of core services that its clients depend on, some parts of the business will be adversely affected.

The good news is that Capita has £450m of liquidity to see it through the crisis. On top of this, Capita’s order book at the end of 2019 was £6.7bn, and the company has been drafted in to help the government respond to the crisis.

With plenty of capital to keep the lights on, as well as customers lined up when things return to normal, Capita’s long-term outlook is bright. With the stock trading at a P/E of below 3, based on 2019 earnings, there’s a good chance Capita could double or triple from current levels over the next few years.

Gaming group

888 Holdings (LSE: 888) is not particularly cheap as bargain shares go, but the stock does look cheap compared to history. Shares in the gaming group are dealing at a P/E of 11.7. That’s compared to the long term average of around 20.

888 appears to be one of the few companies that will benefit from the coronavirus crisis. At the end of March, it reported its best day ever with a 20% jump in customer numbers as people stayed indoors.

If this trend continues, the stock looks deeply undervalued as current levels. As well as its discount valuation, shares in 888 also support a dividend yield of 5.3%. It has a net cash balance of around $52m to support operations.

However, unlike many other businesses, it doesn’t look as if 888 will have to dig into this reserve during the crisis.

On a list of the market’s top bargain shares, 888 certainly stands out in the current market.

Is this little-known company the next ‘Monster’ IPO?

Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead.

Because this North American company is the clear leader in its field which is estimated to be worth US$261 BILLION by 2025.

The Motley Fool UK analyst team has just published a comprehensive report that shows you exactly why we believe it has so much upside potential.

But I warn you, you’ll need to act quickly, given how fast this ‘Monster IPO’ is already moving.

Click here to see how you can get a copy of this report for yourself today

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.

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 considered, so you should consider taking independent financial advice.

More on Investing Articles

Happy young female stock-picker in a cafe
Investing Articles

I’d drip-feed £300 a month into my Stocks and Shares ISA to aim for million

Investing regularly via a Stocks and Shares ISA is a simple way of possibly reaching a million-pound portfolio. Zaven Boyrazian…

Read more »

young woman celebrating a victory while working with mobile phone in the office
Investing Articles

Is this penny stock on track for an explosive recovery in 2022?

Investing in penny stocks is a risky endeavour. But it can also deliver gigantic returns for a prudent investor like…

Read more »

Close-up of British bank notes
Investing Articles

Secrets of the world’s most successful passive income investors

Here's how it's possible to secure a healthy long-term passive income stream, based on a few simple principles gathered from…

Read more »

Smiling young man sitting in cafe and checking messages, with his laptop in front of him.
Investing Articles

Down 50%, will the Royal Mail share price bounce back?

The Royal Mail share price has halved in value in the last year. After such a decline, is it now…

Read more »

Partnership of business concept.
Investing Articles

Director dealings: Marks and Spencer, Cranswick, Homeserve

Director dealings can indicate whether a company's doing well. So, here are this week's biggest insider transactions at three FTSE…

Read more »

Cheerful young businesspeople with laptop working in office
Investing Articles

Best British growth shares for July

We asked our freelance writers to share the top growth shares they’d buy in July, which included data firms and…

Read more »

Shot of a senior man drinking coffee and looking thoughtfully out of a window
Investing Articles

2 FTSE 100 shares to own heading into a recession

Inflation is surging and many global economies are slowing down. Our writer considers the best FTSE 100 shares to own…

Read more »

Smiling young man sitting in cafe and checking messages, with his laptop in front of him.
Investing Articles

UK shares: 1 cheap dividend stock I bought to combat inflation!

This Fool is on the lookout for the best UK shares to protect himself from soaring inflation. Here is one…

Read more »