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2 cheap stocks to buy with £2k in October!

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I’m searching for the best cheap stocks to buy this October. There’s no shortage of low-cost shares following the mini stock market correction which washed out many UK shares. Here are two I’d happily spend £2,000 on now.

Riding the construction boom

Tyman’s (LSE: TYMN) a very cheap stock I’ve my eye on today. City analysts think the door-and-window-component manufacturer will report an 18% profits rise in 2021 as conditions in its core US marketplace steadily improve. This leaves the business trading on a forward price-to-earnings growth (PEG) ratio of just 0.8.

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New home starts in the US leapt 3.9% in August, much better than forecast, while building permits grew 6%, the biggest jump since January. This bodes well for Tyman, which makes more than two-thirds of its income across the Atlantic.

But its Stateside presence isn’t the only thing that appeals to me as a long-term investor. A robust homes market in the UK and Ireland bodes well for Tyman’s operations closer to home. And its exposure to Latin America and Asia gives it access to bright emerging markets such as Brazil, India and China.

Now Tyman’s business is highly cyclical and so it may suffer if the economic recovery runs out off puff. Profit forecasts might also disappoint if supply chain problems persist, or worsen. That said, I think these dangers are baked into the cheap stock’s PEG ratio.

Lady researching stocks

A cheap, emerging market stock

I have exposure to fast-growing emerging markets through stocks like Asian-focussed insurance provider Prudential and fizzy drinks bottler Coca-Cola HBC. I think I could be a bit light when it comes to access to lucrative African territories. So I’m considering buying Airtel Africa (LSE: AAF) for my shares portfolio.

This particular cheap stock operates in two rapidly-growing industries in Sub-Saharan Africa. Its Mobile Voice and Mobile Data divisions allow it to exploit soaring telecoms demand on the continent. Revenues at these units soared 26% and 37% in the three months to June.

Meanwhile its Airtel Money operation gives it access to the mobile money industry which is soaring as personal wealth levels grow in line with financial product demand. Sales here rocketed 54% between April and June.

The massive potential of Airtel Africa’s sectors mean many other companies are investing quickly and heavily to grab a slice of the action. This naturally poses a significant threat to the penny stock’s top line and means it’ll have to keep spending extensively too, possibly to the detriment of shareholder returns.

Still, in my opinion, these threats are more than reflected by Airtel Africa’s low share price. City analysts think the company’s earnings will soar 22% this fiscal year (ending March 2022). This leaves it trading on a forward PEG ratio of just 0.5. Like Tyman, I think this cheap UK stock’s a great buy for October.

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Royston Wild owns shares of Coca-Cola HBC and Prudential. The Motley Fool UK has recommended Airtel Africa Plc and Prudential. 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.

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