I’m looking for the best value stocks to buy and hold for the next decade. Here are three I think are great buys for UK bargain investors like me.
Centamin
Owning gold stocks can be a great way for investors to protect their long-term wealth. Economic, political, and social crises can emerge at a moment’s notice and send stock prices plummeting. But flight-to-safety assets like shares in bullion producers can rise in value during tough times and offset losses elsewhere.
I’m thinking of buying Centamin (LSE:CEY) shares for my own portfolio because of this. I’m also considering building a position following recent positive studies at its flagship Sukari gold mine in Egypt. This showed that expansion here could drive production 30% higher from 2025. Such an uplift could provide the bedrock for robust long-term shareholder rewards.
Today Centamin trades on a forward price-to-earnings (P/E) ratio of nine times. It carries a healthy 5.5% dividend yield as well. I’d buy the miner even though production problems are a constant threat that could whack earnings.
Sure, I can get around this danger by investing in physical gold or a bullion-backed exchange-traded fund (ETF). But Centamin can give me exposure to the precious metal as well as income through a regular dividend. Its my opinion that the company’s juicy yield for 2023 makes it worth the risk.
Kape Technologies
Takeover target Kape Technologies could have a bright future as the fight against cyber crime intensifies. Yet I don’t believe its exciting earnings outlook is reflected in its rock-bottom valuation. Today the tech security giant trades on a P/E ratio of just seven times for 2023.
The high-profile cyber attack on WH Smith last week again highlighted the growing problem of cyber attacks against government bodies and companies. As the world becomes increasingly digitalised the opportunity for hackers is rising strongly. And so is demand for technological solutions.
Kape’s revenues soared 170% in 2022 to £623m, underlining the strength of market growth. The business also expanded its customer base 12% year on year to 7.4m. I’d buy the business despite the fierce competition it faces from larger rivals including Microsoft and NortonLifeLock.
Babcock International
Defence business Babcock International trades on a low forward P/E ratio of 8.4 times for the new financial year that begins in April. I think this makes it a bargain given the prospect of strong and sustained arms spending.
Weapons builders have experienced an upsurge in orders following Russia’s invasion of Ukraine. This particular business has racked up multiple contact wins across the globe since the conflict in Europe began. This includes a £400m contract signed last month to operate the Ministry of Defence’s Skynet military satellite communications system.
Babcock provides a range of products, services, and even personnel training to the world’s militaries. And I’m expecting trading to remain robust as relations between the West and Russia and China come under strain. I’d buy it even though a high-failure hardware failure could prove devastating for future orders.
