Newspaper publisher Reach (LSE: RCH) offers the sort of all-round value I’m finding hard to ignore. Okay, City analysts think earnings will creep just 1% higher in 2022. This follows an anticipated 11% increase for this year. But these projections still result in a rock-bottom price-to-earnings (P/E) ratio of just 7.2 times for next year.
The pace of the recovery in advertising spending continues to surpass most expectations as we close out 2021. I reckon they could continue to surprise in 2022 too, so there’s a good chance Reach’s earnings next year could end better than expected.
I wouldn’t just buy Reach for the ad industry rebound though. I’d also buy it because of the impressive progress it’s making to digitalise its operations. It has added an extra 1.3m reader registrations since the end of July, a trading update this week showed. I’d buy Reach despite the continued problem of falling circulation across its print operations.
Investing for future growth
Door, window and conservatory manufacturer Eurocell (LSE: ECEL) is another cheap UK share on my radar today. A robust housing market and strong consumer spending on home improvements is helping sales to soar. In fact, latest financials this week showed like-for-like revenues between January and October jumped 21% and 38% respectively, versus the same periods in 2019 and 2020.
Eurocell isn’t just thriving because of bright market conditions however. Revenues are also ripping higher as it effectively steals market share from its competitors. Buoyant customer spending and these share grabs have prompted the business to raise profits forecasts at various times in 2021. Eurocell has invested heavily in new warehousing and to boost production capacity to keep this momentum going too.
City analysts think earnings will leap 200%+ in 2021 and by a further 7% next year. Consequently, Eurocell trades on a P/E ratio of 12 times for 2022, a reading I consider good value. I’d buy the company despite the threat posed to profits by rising input costs in the more immediate future.
A cheap UK share for the downturn
A troubling outlook for the British economy suggests that Manolete Partners (LSE: MANO) should witness rising demand for its services. This UK share finances insolvency litigation cases, an industry which I think could grow in 2022 as the number of companies hitting the rocks is unfortunately likely to rise.
Government support for business has suppressed the number of corporate insolvencies during the public health crisis. But even so, Manolete saw case completions rise 23% in the six months to September, latest financials showed. And it said that it’s witnessing “a sharp increase both case enquires and signed cases” since temporary government measures ended on 1 October.
Researchers at Atradius are expecting insolvency levels in the UK to be 33% higher in 2022 compared with pre-pandemic levels. This is the second-highest rate in the world, level with Australia and behind only Italy (where insolvencies are tipped to soar 34%).
So I’m thinking of buying Manolete shares, despite the risk of unfavourable decisions on the litigation cases it finances.
Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.