2 of the best cheap stocks to buy with £500 each

I’m thinking of buying the following cheap UK shares after September’s losses. Here’s why I think they could be among the best British stocks to buy now.

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Plenty of top-quality stocks got washed out during the September sell-off. The investor exodus — sparked by concerns over a crashing Chinese property market and worsening supply chain problems — took no prisoners. Some of the best stocks to buy out there were sold along with the duds.

UK share prices have stabilised since then. But I wouldn’t be surprised to see further carnage on the London Stock Exchange. Covid-19 infections rates remain too high for comfort as the Delta variant runs freely. Rocketing inflation, and the threat of a rapid tightening of central bank policy, is also spooking investors. News that the International Monetary Fund has downgraded global growth forecasts hasn’t helped market confidence this week either.

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Why I’m still bargain hunting!

All that being said, I have no plans to stop shopping for UK shares. September’s sell-off gives me the chance to load up on the best stocks to buy at little extra cost. Some of them trade on P/E and PEG ratios that are so low they offer investors a wide margin for error should the global economy indeed grind to a halt too.

These two glorious UK shares are both on my radar. Here’s why I’d buy them for the long haul.

One of the best FTSE 100 stocks to buy 

I believe GlaxoSmithKline (LSE: GSK) could be one of the best value stocks to buy on the FTSE 100 right now. A forward P/E ratio of 13 times falls a little way below the index’s corresponding average. But it’s in the dividend arena where the pharma giant really makes a splash. Its yield for 2020 sits at a brilliant 5.5%.

Investing in drugs developers can often be risky business. Problems with medicine development and subsequent regulatory approval can cost companies a fortune in extra expenses and lost revenues. However, Glaxo’s terrific track record on this front makes me more confident here than I’d be with many of its rivals.

It’s also a market leader in many fast-growing therapy areas and its products have significant patent protection. As one of the world’s biggest medicine makers I expect profits here to soar as global healthcare spending booms.

Riding the cycling revolution

Halfords Group (LSE: HFD) has struggled to keep up with soaring bicycle demand from the early days of the pandemic. So it’s perhaps no surprise that the retailer’s share price tanked in September as concerns over supply chains worsened. I think now’s a great time to buy Halfords shares though, as today it trades on a rock-bottom forward P/E ratio of 10 times.

The average number of leisure rides jumped 75% in 2020, official data shows. And the popularity of cycling in the UK has remained strong, even as Covid-19 lockdowns have been rolled back. It’s a phenomenon that reflects the growing importance of healthy living and one which bodes well for the likes of Halfords.

What’s more, I expect demand for the store’s bicycles to receive a long-term boost as investment in cycle lanes and related infrastructure increases.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended GlaxoSmithKline. 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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