3 dirt cheap UK shares I’d buy for my SIPP in 2023

Whether I buy them in an ISA or a SIPP, I look for the same value UK shares. Right now, there are so many, I’m spoiled for choice.

| 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.

Trader on video call from his home office

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.

For my self-invested personal pension (SIPP), I’ve always looked for UK shares that I think are great value for the long term.

And I reckon it’s a long time since I last saw so many FTSE shares selling at such cheap prices as now. So what’s on my list of buy candidates for when I next have the cash to invest?

Almost a crime

I can’t ignore Barclays (LSE: BARC) shares, which look almost criminally cheap to me.

Sure, we have super-high inflation. And folks expect the banks to suffer with big bad-debt impairments this year.

Oh, and Barclays is exposed to the US with its international banking business, and a lot of bears are predicting a stock market crash over there.

So yes, there are things that could hold Barclays shares back, or maybe even send them lower.

But come on, we’re looking at a forecast price-to-earnings (P/E) ratio of only 4.8 now. That’s only about a third of the long-term FTSE average, and it’s for a company offering more than 5% in dividends.

Will Barclays shares be worth more by the time I retire? I think so.

Go for growth

My second pick, Scottish Mortgage Investment Trust (LSE: SMT), is quite different.

It buys mainly US high-tech growth stocks. That means things like semiconductor leaders ASML and Nvidia, electric vehicle maker Tesla, and pharma developer Moderna.

Those are on the Nasdaq index, which, at times, has been home to the most overvalued stocks on earth.

But it fell hard from its peaks of late 2021. Since the start of 2023, it has been picking up, though.

Yet I still think US tech stocks are in an undervalued phase. Now, if there is a US crash, I expect them to become even more undervalued. But again, in a SIPP (or an ISA), I’d be buying for retirement day, not for next year.

Oh, and Scottish Mortgage shares trade at a discount of 19% to their underlying asset value. So they’re on special offer now too.

Gas bags

National Grid (LSE: NG.) looks better to me now than it has for some time.

There’s a problem, though.

As well as the electricity grid that it’s named after, the company also operates the gas distribution network. And the days are surely numbered there.

When fossil fuels end, so will part of National Grid’s business. So yes, there could be bumpy times ahead.

But all those new renewable thingies that will replace oil and gas will generate electricity, and someone has to distribute it. Right now, National Grid is the only game in town.

The P/E of 14 is close to FTSE 100 average. But for a monopoly with clear earnings visibility, I think that’s cheap. And a forecast dividend yield of 5.6% looks tasty too.

Buy them?

Whether I buy these three depends on how they look when I’m ready for my next investment. But they’re on my shortlist.

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.

Alan Oscroft has positions in Scottish Mortgage Investment Trust Plc. The Motley Fool UK has recommended ASML, Barclays Plc, Nvidia, and Tesla. 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

Investing Articles

This FTSE 250 stock is up 30% in July! Should I buy it now?

This FTSE 250 technology stock has seen its share price rise by 30% already in July. Roland Head asks if…

Read more »

Investing Articles

Forget Rolls-Royce shares! I’d rather buy this FTSE stock

Despite Rolls-Royce (LSE: RR.) shares faring well in recent times, our writer explains why she would prefer to buy this…

Read more »

Investing Articles

Rio Tinto’s share price slumps following production update! Time to buy in?

Poor production news has pulled Rio Tinto's share price sharply lower again. Is the FTSE 100 mining stock now too…

Read more »

Investing Articles

Could investing £20,000 in a Stocks and Shares ISA make me a millionaire?

Ben McPoland takes a look at how many years it might take to grow a £20k Stocks and Shares ISA…

Read more »

Investing Articles

Are these 2 dividend stocks no-brainer buys for a winning portfolio?

Sumayya Mansoor takes a closer look at these dividend stocks to see if they can help her build wealth through…

Read more »

Investing Articles

Does a 35% price drop make Trufin one of the best AIM shares to buy now?

The Trufin share price has just fallen by over a third after Lloyds terminated a contract. Does this make it…

Read more »

Investing Articles

4% yield and 45% growth in 12 months forecasted! I love this passive income investment

Our author says this passive income investment is significantly undervalued with a generous dividend yield. It's at the top of…

Read more »

Woman sneaker shoe and Arrow on street with copy space background
Investing Articles

£5,000 in savings? Here’s how I’d start investing in FTSE shares today

Based on his own experiences, Paul Summers reflects on the steps he'd take if he wanted to begin investing in…

Read more »