A dirt-cheap UK share I’d buy after the stock market crash

I already own this ultra-cheap UK share in my portfolio. And I’m thinking of adding more of it following recent share price weakness. Here’s why.

| More on:

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.

UK share markets were jam-packed with bargain stocks before last week’s mini stock market crash. The fright that investors received after news of the Omicron coronavirus variant last week has left even more top companies at prices I’d consider too cheap for me to miss.

TI Fluid Systems (LSE: TIFS) is one I’m thinking of loading up on for my Stocks and Shares ISA following recent price weakness. In fact it’s a UK share I already own, one I purchased to try and make the most of the electric vehicle (EV) revolution. This business produces all sorts of fluid-carrying components that major autobuilders need. And encouragingly pure-play EVs and hybrid vehicles require far higher loadings of this tech than cars with internal combustion engines.

5 Stocks For Trying To Build Wealth After 50

One notable billionaire made 99% of his current wealth after his 50th birthday. And here at The Motley Fool, we believe it is NEVER too late to start trying to build your fortune in the stock market. Our expert Motley Fool analyst team have shortlisted 5 companies that they believe could be a great fit for investors aged 50+ trying to build long-term, diversified portfolios.

Click here to claim your free copy now!

Riding the EV revolution

Demand for EVs is soaring as consumer concerns over the climate crisis worsen. It looks set to continue rocketing too. The International Energy Agency (IEA) reckons there will be 145m EVs on the world’s roads by 2030. That compares with the 11m in existence last year. And major carmakers are doubling-down on spending in this area to grab a slice of the action (not to mention enhance the green credentials of their brands).

Japan’s Nissan is the latest major name to announce plans to turbocharge investment in EVs. The carmaker will invest ¥2trn over the next five years and bring out 23 electric models by 2030, it announced on Monday. The rewards for TI Fluid Systems, which already supplies parts to Nissan, could be huge as carmakers steadily make the switch from traditional engines.

Supply chain strains

Like many other UK shares, the TI Fluid Systems share price just closed at its cheapest for more than a year on fears over the Omicron variant and what this could mean for car demand and automotive supply chains.

In truth though, worries over supply chain issues in the industry — and what this could mean for TIFS’ product in the near term — have been steadily growing for some time. Consequently the company’s price has been locked in a downtrend since the end of the summer. A near-20% decline in light vehicle production between July and September dragged revenues 14.7% lower at constant currencies.

Too cheap to miss?

It’s my belief, though, that this weakness represents a great dip buying opportunity. At current prices of 221p per share this cheap UK share trades on a price-to-earnings (P/E) ratio of just 9.2 times for 2022. TI Fluid Systems also offers up a meaty 3.1% dividend yield for next year. This smashes the broader forward average of 2% for FTSE 250 shares.

Its true that profits could disappoint if shortages of key parts continue to hit car production. Some industry experts, like the head of Mercedes-Benz, have suggested the problem could persist into 2023. Still, I think the firm’s brilliant long-term outlook — one closely tied to the EV revolution — still makes it one of the best cheap UK shares for me to buy today. 

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 still 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 is here to help: our UK Chief Investment Officer and his analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global lock-down…

You see, here at The Motley Fool we don’t believe “over-trading” is the right path to financial freedom in retirement; instead, we advocate buying and holding (for AT LEAST three to five years) 15 or more quality companies, with shareholder-focused management teams at the helm.

That’s why we’re sharing the names of all five of these companies in a special investing report that you can download today for FREE. If you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio, and that you can consider building a position in all five right away.

Click here to claim your free copy of this special investing report now!

Royston Wild owns shares of TI Fluid Systems. 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.

More on Investing Articles

Thoughtful anxious asian business woman looking away thinking solving problem
Investing Articles

3 UK shares to buy in a stock market crash

Inflation and rising interest rates have our author on the lookout for a stock market crash. Here’s what he’s looking…

Read more »

Buffett at the BRK AGM
Investing Articles

3 Warren Buffett techniques to build my wealth

Our writer shares a trio of Warren Buffett investing habits he hopes can help him build his own wealth.

Read more »

Futuristic front of NIO car in Norwegian showroom
Investing Articles

Down over 50%, is NIO stock the best EV pick right now?

NIO stock has dipped over 50% in the past year. Does this create the perfect opportunity to buy or are…

Read more »

happy senior couple using a laptop in their living room to look at their financial budgets
Investing Articles

Aviva shares are in demand. Should I buy too?

Hargreaves Lansdown investors were piling into Aviva shares last week. This Fool is asking whether he should join the queue.

Read more »

A pastel colored growing graph with rising rocket.
Investing Articles

3 reasons why I think the IAG share price could rally this year

Jon Smith writes about how improving risk sentiment could help the IAG share price this year, but not without risks…

Read more »

Passive and Active: text from letters of the wooden alphabet on a green chalk board
Investing Articles

A passive income stock I’ve bought to supercharge my wealth!

I think this UK dividend stock is one of the best to buy for healthy long-term passive income. Here's why…

Read more »

British Pennies on a Pound Note
Investing Articles

3 hot penny stocks I’m buying in June!

With their exciting growth potential, penny stocks can be great investments. I've found three to buy next month based on…

Read more »

Passive income text with pin graph chart on business table
Investing Articles

2 green dividend shares I’d buy with £500

Jon Smith explains two dividend shares with a focus on renewable energy that have caught his eye at the moment.

Read more »