The Motley Fool

Has Omicron created the biggest buying opportunity for cheap UK shares?

UK money in a Jar on a background
Image source: Getty Images

Finding cheap UK shares is often top of an investor’s priority list. After all, buying a business at a discount is a proven strategy of generating enormous wealth – just look at billionaire investor Warren Buffett. Uncovering these opportunities can be a long and arduous process.

However, since last Friday, the market has been in a bit of a downward spiral, potentially making things a lot easier.

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!

After discovering a new strain of Covid-19 emerging from southern Africa, fears of another Christmas lockdown are on the rise. Apart from being frustrating for families eager to celebrate the holidays, the re-introduction of restrictions could be very disruptive to businesses.

2020 serves as a perfect example of the worst-case scenario if the Omicron variant proves to be as nasty as some people are currently speculating. So I’m not surprised to see some investors selling off their positions to try and mitigate potential losses. But has this market adjustment caused some UK shares to be too cheap? Let’s explore.

The power of rising uncertainty

Despite what the sharp drop in share prices would indicate, there’s little known information about the new variant. Having only been recently discovered, scientists are still trying to work out whether this is something to worry about.

As it stands, knowledge surrounding its transmissibility, symptom severity, and the effectiveness of vaccines are unknowns. And it’s possible that this variant, like several others before it, could simply fade away within a few months. Of course, the opposite could also be true, and it may be the worst strain yet.

Uncertainty and the stock market don’t exactly get along. And with some investors fearing the worst, volatility is on the rise as they rush to the exit gates. But as unpleasant as it is to see my portfolio move in the wrong direction, the panic may have created some substantial buying opportunities. Why? Because many UK shares caught in the selling crossfire are now looking rather cheap.

Finding the best cheap UK shares

Simply throwing my money at the businesses that suffered the largest drops these past few days is not a prudent strategy, in my opinion. After all, some of the biggest fallers are travel stocks. And most have a pretty unhealthy balance sheet after using debt to stay afloat during 2020. Not to mention that if Omicron turns out to be a disaster, the sector is likely to get pummelled.

Instead, I’m searching for cheap UK shares that may actually profit from another round of lockdowns, but can still thrive in a post-pandemic world. And one that might fit this description is Learning Technologies Group (LSE:LTG).

This tech stock hasn’t had the best run in the last six months. And the past few days have only continued this downward decline. But despite what the falling share price would indicate, the business could generate some explosive long-term growth.

LTG provides a remote learning platform for employees to complete training for almost any profession from the comfort of their homes. In a post-pandemic world, it’s possible that the demand for such solutions could fade away. However, given the cost-saving benefits for employers and the convenience factor for employees, I don’t think that will be the case.

But there's also another UK share that looks too cheap in my mind...

One FTSE “Snowball Stock” With Runaway Revenues

Looking for new share ideas?

Grab this FREE report now.

Inside, you discover one FTSE company with a runaway snowball of profits.

From 2015-2019…

  • Revenues increased 38.6%.
  • Its net income went up 19.7 times!
  • Since 2012, revenues from regular users have almost DOUBLED

The opportunity here really is astounding.

In fact, one of its own board members recently snapped up 25,000 shares using their own money...

So why sit on the side lines a minute longer?

You could have the full details on this company right now.

Grab your free report – while it’s online.

Zaven Boyrazian owns shares of Learning Technologies. The Motley Fool UK has recommended Learning Technologies. 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.