I’m on the hunt for the best cheap UK shares to buy for my Stocks and Shares ISA. Here are two top quality stocks I’m thinking of snapping up.
Food retailer Parsley Box Group (LSE: MEAL) hasn’t had an easy ride since its IPO back in April. In fact it’s halved in value from its launch price as investor confidence has eroded. It was last trading just above penny stock territory at 101p per share.
Parsley Box’s share price reached a new low following interims released last week. Though the retailer saw revenues leap 26% higher in the six months to June, to £1.4m, soaring costs caused pre-tax losses to rocket 432% year-on-year to £5.4m. There’s a danger that costs could remain elevated, too, if Covid-19 cases continue to harm the supply chain and Brexit-related trade disruptions persist.
That said, I think Parsley Box could be an attractive buy for long-term investors. This is because its products and services are aimed at the over-60s, a demographic that’s growing fast and which is one of the more affluent age categories. There are said to be more than 12m people aged 65 and over today, according to the Office for National Statistics. This is a figure that’s set to keep surging and which will top 20m within the next 50 years.
And so far this cheap UK share seems to be making a splash here, the number of active customers rising 77% in the first half. With a healthy balance sheet Parsley Box has the means to keep growing its customer base through fresh marketing campaigns and further product innovation, too.
A cheap UK share in good health
Snapping up Alliance Pharma (LSE: APH) shares is another good idea, in my opinion. In fact, trading at this cheap UK share has been particularly strong of late and turnover bounced 24% in the six months to June. I’d buy it before its half-year results announcement is released on Tuesday, 21 September.
Alliance Pharma’s consumer healthcare portfolio is packed with market-leading global brands like its Kelo-Cote scar treatment, Nizoral anti-dandruff shampoo, and Amberen menopause product. The tremendous brand power of these must-have healthcare products allows the company to grow profits during both strong and weak economic periods.
That said, Alliance Pharma endured a rare profits decline in 2020 as Covid-19 closed retail outlets, making it harder for customers to get its products. Delays to routine treatments caused further problems as demand for the healthcare play’s prescription products also dropped. It’s important to remember, then, that further bottom-line trouble could be around the corner as coronavirus cases rise.
All that being said, I still think this cheap UK share’s a top buy for me as a long-term investor. In particular I’m excited by Alliance Pharma’s ambitious acquisition-led growth strategy, one that’s given annual earnings growth a significant boost in years gone by, and which the company has the balance sheet strength to continue pursuing.