After recent market turbulence, I’ve been looking for the best cheap UK shares to buy right now. Here’s a list of the stocks I’m considering adding to my portfolio over the next 12 months.
Some of these companies are riskier than others. My analysis is based on their potential over the next few years, rather than speculating on what could happen over the next few weeks or months.
Therefore, my list of the best cheap UK shares to buy right now might not be suitable for all investors. The outlook for the UK and global economies are highly uncertain, so it’s more important than ever investors shouldn’t outlay more than they can afford to lose.
The best cheap UK shares
I think some of the best cheap UK shares on the market right now are recovery plays. Companies such as Marks & Spencer, John Wood, and FirstGroup.
All of these businesses operate in different sectors and industries. They all face different headwinds, outlooks, and challenges.
M&S is struggling to remain relevant in the viciously competitive retail market. Meanwhile, engineering group John Wood has suffered in the oil market downturn. The pandemic has eliminated the demand for FirstGroup’s public transport.
The challenges these companies face cannot be understated. However, they also have opportunities as well. That’s why they feature on my list of the best shares to buy right now. For example, Marks & Spencer has reported explosive growth for its food offering. Management intends to double down on this going forward.
John Wood has been expanding into the rapidly growing renewable energy market. As the world tries to become more efficient and less reliant on individual vehicles, I think the demand for FirstGroup’s public transport options will grow in the long term.
Despite the challenges these groups face, I’d buy these companies for my portfolio based on their long-term growth potential.
Best shares to buy right now
Another company on my list of stocks to pay close attention to over the next 12 months is the outsourcing group Capita.
This business has run into multiple problems over the past five years. Management has spent a tremendous amount of time and effort overhauling the group to get past these issues.
It finally looks as if Capita is putting these problems behind it which, in my opinion, is incredibly positive for the group’s long-term potential.
That’s not to say the company won’t face any headwinds from now on. The errors it made in the past significantly impacted its reputation and that of the outsourcing industry in general. This could mean the group sees a lower level of demand going forward. As such, it may never return to its former glory.
Still, I’d buy this company as a play on the UK economic recovery. Increased activity may lead to higher demand for its services. This would boost Capita’s top and bottom lines and provide more funding for the business to invest in growth.
