I’m searching for the best low-cost stocks to buy this December. Here are two top, cheap UK shares on my shopping list.
Red metal mammoth
I think Taseko Mines (LSE: TKO) could prove to be a great stock for me to buy as electric vehicle sales explode.
According to the Copper Development Association, a vehicle running on an internal combustion engine tends to contain 23kg of copper. That compares with the 40kg that’s loaded into the average hybrid electric vehicle. Or the 83kg that sits inside a battery-powered car.
The copper Taseko hauls from Canada’s colossal Gibraltar mine will be needed in huge quantities to make these vehicles. That’s without considering the large amounts of the highly-conductive metal that’ll be needed to create a charging infrastructure for these vehicles.
Gibraltar is the fourth-biggest copper mine in North America and is expected to continue operating until 2038. Taseko also owns the low-carbon Florence Copper project in Arizona. This is on track to produce its maiden output in 2023. And it is looking to begin construction on the gigantic Yellowhead mine in British Colombia towards the middle of the decade. This Canadian asset’s proven and probable red metal reserves sit at an eye-popping 820m tonnes.
It’s all well and good sitting on blockbuster mining projects. But bringing their riches to the surface can be extremely problematic. Any development, construction and production issues could bring Taseko’s profits expectations crashing down. And with it the share price. Still, on balance, I think this UK mining share has plenty going for it.
Another dirt-cheap UK share I like
Companies are spending massive sums on marketing and advertising to recover the revenues lost during the global pandemic. Analysts are expecting such expenditure to keep rising in 2022 too, which bodes well for The Pebble Group (LSE: PEBB).
Through its Brand Addition and Facilisgroup divisions it sells a vast range of promotional goods to big corporations and allows SME promotional product distributors to peddle their wares.
Revenues at The Pebble Group rocketed 39.3% year-on-year in the first half of 2021, to £46.8m, as businesses turbocharged marketing spend. But this UK share is more than just a flash in the pan. It has built long-term relationships with global blue-chip companies. This means more than 90% of revenues are recurring, providing the company with excellent profits stability.
The promotional products market is growing rapidly as they enable firms to raise brand awareness at relatively low cost. The Pebble Group estimates that around 10% of total marketing spend is dedicated to producing logo-stamped T-shirts, mouse mats and the like.
I am aware that earnings at companies like this are highly sensitive to broader economic conditions. I’d therefore expect the recent recovery at The Pebble Group to suffer should the pandemic continue to worsen. Still, from a long-term perspective, I reckon The Pebble Group provides plenty of opportunity for lovers of cheap UK shares like me.
