The Motley Fool

One of the best dirt-cheap UK stocks to buy with £500

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

The UK national flag in front of Canary Wharf skyscrapers where professionals trade shares for a living.
Image source: Getty Images

Investors don’t need to fork out eye-watering sums every month to build a winning shares portfolio. History shows us that the average long-term investor makes an annual return of 8%-10%. Those who take the time to build a sound investment strategy filled with the best UK stocks can make even more.

Let me take that 8% figure to show how regular investment can end up making share pickers a big pot of cash. If I were to invest £500 in a Stocks and Shares ISA every month I could potentially expect to make at least £563,420 after 30 years.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. And if you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio.

Click here to claim your free copy now!

This offers much more potential for me to make glorious returns than a traditional low-yielding savings product like a Cash ISA. Even the best-paying instant-access account doesn’t offer a better interest rate than 0.6% today. I also prefer to buy UK shares than cryptocurrencies like Bitcoin as regulators clamp down on them. I worry about the prices of these new-age currencies going all the way down to zero.

Not that share returns are guaranteed, of course. Stock prices can fall and dividends can be cut, while a historical figure can’t be used to predict the future. But overall, I still see the stock market as a better home for my cash.

A cheap UK stock on my radar

Why take a chance with high-risk assets like cryptocurrencies anyway? As I say, stock markets have a long history of making individuals huge wads of cash. Buying following selloffs can help one supercharge the returns they can make over the long term too.

I believe NCC Group (LSE: NCC) could be one of the best stocks to buy to fight the growing problem of cybercrime. I also think it might be one of the best value shares to buy, following its recent share price fall. City analysts think earnings here will shoot 26% higher this fiscal year (to May 2022). At current prices, this leaves the company trading on a forward price-to-earnings growth (PEG) ratio of just 0.8.

A reminder that a reading below 1 suggests a UK stock could be undervalued. My belief that NCC could now be too cheap for me to miss having been reinforced by the excellent trading release of mid-September. Then the cybersecurity giant said that sales jumped 2.6% in the 12 months to May, a result which pushed pre-tax profit 54.2% higher year-on-year.

Stunning profits growth on the horizon?

As NCC noted in that release: “Cyber resilience is no longer optional for any organisation and has become a board-level issue.” The cybersecurity market was already growing at 8%-9% a year before the outbreak of Covid-19, the company says. I fully expect the sector to grow even faster in the coming years too, given the growth of e-commerce and non-office-based working in the wake of the pandemic.

Okay, NCC operates in a highly-competitive market and it will have to paddle extremely hard to compete with industry giants like Microsoft, Mcafee and FTSE 100-quoted Avast. But I think this threat is more than reflected in the company’s rock-bottom valuation. I think NCC could be one of the best UK tech stocks to buy right now, and particularly at recent prices.

One Killer Stock For The Cybersecurity Surge

Cybersecurity is surging, with experts predicting that the cybersecurity market will reach US$366 billion by 2028more than double what it is today!

And with that kind of growth, this North American company stands to be the biggest winner.

Because their patented “self-repairing” technology is changing the cybersecurity landscape as we know it…

We think it has the potential to become the next famous tech success story.

In fact, we think it could become as big… or even BIGGER than Shopify.

Click here to see how you can uncover the name of this North American stock that’s taking over Silicon Valley, one device at a time…

Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Royston Wild has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Microsoft. The Motley Fool UK has recommended Avast Plc and NCC. 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.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.