Looking for cheap shares? This well-known stock trades for just 50p!

There are plenty of cheap shares in the market right now due to market volatility and, according to our Fool, this one may be too good to miss.

| 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.

Bronze bull and bear figurines

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Macroeconomic headwinds such as rising inflation and interest rates have hampered markets and thrown up many cheap shares to buy and hold. One stock I’d like to take a closer look at is Currys (LSE: CURY).

Selling tech products

Currys is a household name in the UK. It sells all the technology products you might need from essentials such as washing machines, to luxury products such as televisions and cameras. It has 832 stores across eight countries and even offers support services and repairs too.

As I write, Currys shares are trading for just 50p. This puts them into penny stock territory. At this time last year, they were trading for 63p, which is a 20% drop over a 12-month period.

Cheap shares or a value trap?

Currys struggled during the pandemic period and its shares tumbled. It hasn’t recovered to pre-pandemic levels yet either. Despite that, I noticed that insiders are buying shares, as recently as last month. The chairman, a non-executive director, and chief financial officer all spent their own money buying up shares. In total they spent £150K. When insiders buy shares, I see this as a major positive. After all, who knows the direction of a business better than those helping to run it.

Next, Currys’ valuation looks cheap right now on a price-to-earnings ratio of just six.

Moving on to Currys most recent results, a full-year report for the 2022/23 period, these were a mixed bag for me. Currys overall posted a loss of £450m. Digging deeper, it made great progress in the UK segment, where it is a market leader. Unfortunately, where it is looking to grow its market share, the Nordics, it fell short. The firm said this was because competitors were pricing items at levels that it deems unsustainable for the longer term. Currys believes it can rebound here in the future.

Further negative news from the Currys update for me was the suspension of its dividend. This is a blow, but understandable based on recent results and the fact the economy is in a difficult position. Many retailers are struggling as a cost-of-living crisis has emerged in the UK. Inflation and rising costs across the world are an issue too. This means consumers have less to spend on non-essential goods.

My decision

On paper, Currys looks like one of the cheap shares I mentioned earlier. With that in mind, I’m hesitant to buy any shares for my holdings despite a low valuation and insiders buying shares. The faith of management to spend their own hard earned cash is good to see, but I want to see more tangible results in the next fiscal year before I part with my own money.

In addition to this, the company operates in a market that is changing, whereby purchasing of electrical items, like many other goods, is slowly moving online. Despite that, Currys insists it performs better from its in-store transactions compared to its online offering.

I’m going to put the shares on my watch list for now and keep an eye on developments.

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 assessed. Consider taking independent financial advice.

Sumayya Mansoor 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

A pastel colored growing graph with rising rocket.
Investing Articles

How much passive income could I make for every £1,000 invested in Aviva shares?

Even a relatively small investment in Aviva shares could generate much greater passive income, particularly if the dividends are reinvested…

Read more »

Close-up of British bank notes
Investing Articles

I’m considering 100 shares in this FTSE 250 gem to aim for £300 a month in dividends

Mark Hartley outlines why a lesser-known banking stock from the FTSE 250's worth considering for an income portfolio in 2024.

Read more »

Investing Articles

History suggests these UK shares might soar if interest rates are cut in August

Some UK shares could rocket if interest rates fall from its 5.25% high next month. And there's one our writer…

Read more »

Female Doctor In White Coat Having Meeting With Woman Patient In Office
Investing Articles

Here’s why H1 results could boost the AstraZeneca share price

The AstraZeneca share price has been a success story in the past five years. With H1 results due, can it…

Read more »

Investing Articles

£17,365 in savings? Here’s how I’d use it to target a £6,700-a-month passive income

Here's how a lump sum investment could pave the way for me to make a four-figure monthly passive income in…

Read more »

Investing Articles

Down more than 10% in 6 months, Fools are backing these 5 UK stocks to reverse that – and then some! – by 2025

Some of our UK free-site writers have put forward their candidates for turnaround stocks!

Read more »

Investing Articles

Down 23%! Should I buy more CrowdStrike shares for my Stocks and Shares ISA?

Sometimes bad news can be good news for long-term investors. But is that the case for CrowdStrike in relation to…

Read more »

Investing Articles

2 UK shares near 52-week lows I’m considering snapping up

These UK shares are loitering near, or at, 52-week lows. Are these prime opportunities for our writer to boost her…

Read more »