A dirt-cheap stock to buy and hold for the next 10 years!

Could this be one of the best cheap stocks for me to buy right now? Here’s why I’d hold on to this top UK share for the next decade.

| 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.

Market volatility has cranked up several gears following the tragic conflict enveloping Ukraine. For UK share investors there could be more choppiness to come too, as inflation soars and central banks aggressively raise interest rates in response.

Should I still be looking for cheap stocks to buy for my portfolio?

As a long-term investor, the prospect of further market volatility hasn’t derailed my investment plans. History shows us that stock markets are, over a period of a decade or more, a great way to build wealth. The average yearly return for long-term share investors clocks in at around 8%.

This is why I’m continuing to search for cheap stocks to buy today. I may even be able to pick up a bargain or two following recent market volatility. Here are two ultra-cheap stocks I’m considering snapping up.

Riding the green revolution

Sales of bicycles soared during Covid-19 lockdowns and Halfords Group (LSE: HFD) has been a huge beneficiary. Demand for its two-wheeled products has since cooled however, and latest financials showed cycling revenues down 23.8% year-on-year in the three months to December. Much further pressure could be coming too as consumer confidence comes under pressure.

Those sales numbers are no surprise though, given the electrifying demand for its product in the prior year. In fact, as a long-term investor, Halfords still has plenty of appeal for me. I expect sales of its bikes to steadily rise this decade as people switch away from their cars and head for the great outdoors.

The desire to lead healthier lifestyles continues to rise across society in this post-pandemic age. People are also looking for more environmentally-friendly ways to travel as the climate crisis worsens. What’s more, spending on cycling infrastructure is steadily increasing too in a bid to encourage people to take up cycling.

A cheap stock to buy today

Just yesterday, Brompton announced ambitious expansion plans that illustrate the robust outlook for bike sales over the next decade, at least. The folding bike specialist said its new factory it intends to open in 2027 will manufacture 200,000 cycles each year. It currently sells around 70,000 of its products per annum.

Now Halfords is expected to see some turbulence in the near term as supply chain issues bite and sales slow from recent levels. City analysts think earnings at the firm will slip 20% in this outgoing financial year ending March 2022. But they think profits will stabilise in fiscal 2023 before rising 8% the following year.

Based on these predictions, I think Halfords is a terrific cheap stock to buy. At current prices of 277p per share, the retailer trades on a forward price-to-earnings (P/E) ratio of 8 times. I think this rating, below the bargain benchmark of 10 times, fails to reflect Halfords’ solid long-term profits outlook. I’d buy it today with the aim of holding it for years to come.

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.

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.

More on Investing Articles

Middle-aged white man pulling an aggrieved face while looking at a screen
Investing Articles

Is another stock market crash on the way?

The US stock market has already crashed in 2022, losing 25% of its value at its June low. However, UK…

Read more »

Smiling white woman holding iPhone with Airpods in ear
Investing Articles

A 6.2% FTSE 100 dividend stock I’d buy to boost my income

This FTSE 100 dividend stock offers a yield well above the index average. Here's why I'd buy it to supercharge…

Read more »

Abstract 3d arrows with rocket
Investing Articles

2 beaten down FTSE 100 shares that look ready for liftoff 

With the UK market showing strong signs of recovery, I am considering these two overlooked FTSE 100 shares for my…

Read more »

Smartly dressed middle-aged black gentleman working at his desk
Investing Articles

3 top UK shares for August 2022 and beyond

I've been buying top UK shares since late June such as these three companies that look attractive right now.

Read more »

Black woman using loudspeaker to be heard
Investing Articles

FTSE 100 live: the Footsie closes on 7,500

The Footsie, like many other global markets, has been pretty volatile in recent months, but today it almost closed above…

Read more »

Woman using laptop and working from home
Investing Articles

High-dividend stocks! Should I buy Royal Mail’s shares for its 7.3% yield?

The Royal Mail share price carries a dividend yield twice as large as the average for UK shares. Does this…

Read more »

Middle-aged white man wearing glasses, staring into space over the top of his laptop in a coffee shop
Investing Articles

UK shares: should I buy this oil and gas infrastructure stock?

Jabran Khan is looking for the best UK shares for his holdings. Could this oil and gas infrastructure provider fit…

Read more »

Smiling young man sitting in cafe and checking messages, with his laptop in front of him.
Investing Articles

This REIT could be the perfect stock to supercharge my passive income stream!

Jabran Khan is looking for stocks to boost his passive income through dividend payments. He identifies one REIT to help…

Read more »