3 cheap UK shares to buy now for growth with £300

These three UK shares all look cheap compared to their growth potential over the next couple of years, says this Fool, who would buy them.

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After the recent stock market wobble, I have been looking to snap up some cheap UK shares with growth potential. I think the companies below have tremendous potential over the next few years. As such, I would buy all three for my portfolio today with an investment of £300. 

UK shares for growth 

4imprint (LSE: FOUR) is a direct marketer of promotional products. These are the promotional products companies give to their clients, such as branded pens, water bottles and T-shirts. 

This market might not seem all that exciting, but it is big business. 4imprint has multiplied over the past five years, capitalising on its position in the market and re-investing for growth. Sales nearly doubled between 2016 and 2020, although they fell 50% when the pandemic hit. 

Going forward, sales could remain under pressure if events and marketing activity does not return to pre-pandemic levels. This is probably the most considerable risk to the group’s growth right now. 

Despite this potential headwind, City analysts think the company’s earnings could rebound to pre-pandemic levels by 2023. From there, the group will be able to build on its position to expand its footprint further, suggesting its outlook will only improve over the next few years. 

Near collapse

If 4imprint struggled during the pandemic, On The Beach (LSE: OTB) had a near-death experience. The company has been haemorrhaging money for the past two years, relying on investors to keep the lights on. 

With the international travel market beginning to reopen, it looks as if the outlook for the business is starting to improve. City analysts believe the business will return to profit in its current financial year and build on this growth in fiscal 2023. 

Of course, there is no guarantee this growth will materialise. Challenges the corporation will face include additional coronavirus-induced restrictions and the rising cost of living. Higher prices could also lead to a delay in spending. 

Still, even considering these headwinds, I think the company’s outlook will improve significantly over the next two years. That is why I would add it to my portfolio of UK shares with growth potential. 

Charging ahead

As the two firms above struggling with the pandemic, Bloomsbury Publishing (LSE: BMY) knocked it out of the park. Profits have increased by around 50% since 2020 as the demand for books has surged

The company is planning to build on this growth in the years ahead. It is using its pandemic windfall to fund new growth initiatives, such as its online learning platform. It is also continually hunting for new authors to add to its catalogue of books. 

This is a bit of a hit and miss process. The enterprise’s most successful association has been the Harry Potter franchise, but there is no guarantee it will find another blockbuster. A string of poor decisions could leave the company struggling with declining sales and profits. 

Even considering this challenge, I am excited by the group’s prospects. It has a cash-rich balance sheet with no debt and supports a dividend yield of 2.8%. Considering these qualities, I think this is one of the best UK shares to own now. 

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be considered so you should consider taking independent financial advice.

Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has recommended 4imprint Group, Bloomsbury Publishing, and On The Beach. 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.

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