These two cheap shares have exploded this month. I expect more gains to come!

What a month it’s been so far for UK shares. In the stock market, the fireworks didn’t just happen on Bonfire Night, because shares have been shooting up almost every trading day. As I write, the FTSE 100 index has surged over 850 points (15.3%) in November so far. That’s a great bounce-back from the six-month low the index hit at the end of October. Of course, this rising tide has not lifted all shares equally, with laggards and leaders distributed across the Footsie. Here are two stocks that have surged, but I still regard as cheap shares.

Cheap share #1: NatWest Group

Since Halloween, the cheap shares of NatWest Group (LSE: NWG) have skyrocketed. In fact, NatWest is in the top five best-performing FTSE 100 shares over the past 30 days. For the record, NatWest stock is up more than a third (34%) in one month. That is a gigantic gain in such a short time from a so-called ‘boring’ value share. As I write, NatWest stock changes hands at 151.85p, but I still insist that this share is still stuck firmly in the FTSE 100’s bargain bin.

At their 52-week high on 13 December last year, NatWest shares closed at 265p — almost three-quarters (74.55) above their current level. Obviously, being the UK’s biggest lender to small businesses isn’t exactly ideal during the worst economic collapse in three centuries. But, as I said on Halloween, NatWest actually made a third-quarter profit and could have as much as £8bn in excess capital. When the bank formerly known as RBS returns to paying chunky dividends, I expect its shares to soar. That’s why I’d buy these cheap shares now while stocks last.

Barclays is up 36% in a month

The second of my cheap shares also comes from a big British bank. As with NatWest, shares in ‘boring’ Barclays (LSE: BARC) have soared in November. Over the past month, they’ve actually slightly beaten NatWest stock, having surged 35.8% since 16 October. Again, that’s the sort of large-cap return one expects over several years and not several weeks. However, like NatWest stock, Barclays shares were insanely cheap recently, notably when they closed at the ridiculously low price of 91.55p on 25 September.

Today, the Barclays share price is a much healthier 137.7p, yet this still values this Big Four bank at a mere £23.3bn. That’s a very modest price tag for a leading UK bank with 24 million customers worldwide and total assets of over £1.1trn. At its 52-week high on 16 December 2019, the Barclays share price closed at 193p. That’s about two-fifths (40%) above today’s price. This hardly indicates that Barclays is out of the ‘cheap shares’ bin quite yet, so there could be more gains to bank.

On 15 October, I said I’d buy Barclays shares at 101.54p, ideally inside an ISA, to enjoy future capital gains and the return of tax-free dividends. Since then, the share price has exploded, leaping 35.6%. Nice. But my argument is unchanged: namely, that Barclays’ assets are undervalued and that its earnings will rebound post-Covid-19. Likewise, the bank’s balance sheet is rock-solid and easily has enough liquidity and excess capital to cope with expected loan losses. Also, when Barclays resumes paying cash dividends next year, income funds will dive back in. Hence, I’d buy these cheap shares today — while they’re still selling at a discount — to get in before the rush to buy in 2021!