With the UK economy under severe pressure, and inflation remaining stubbornly high, many companies are struggling. This has made UK shares dirt cheap.
However, I believe this presents an opportunity for investors. Some of these companies that have seen their share prices fall represent great value.
I will be going through three of these companies that I believe investors should take note of.
Legal & General
Legal & General (LSE:LGEN) offers a diverse set of services in the financial services industry. These include investment management, life assurance, lifetime mortgages, and pensions.
Due to the nature of this sector, there is some risk in holding the shares. For example, the US banking crisis in March saw Legal & General shares fall by 13.9% in eight days.
However, I don’t believe this is representative of the company, as it has proven quite resilient. While interest rates have risen dramatically over the last year, Legal & General’s operating profit was £941m in its half-year results. This is only a fall of £17m from this time last year when interest rates weren’t so high.
Despite this, the shares have fallen by 10% over the last year.
The shares look to have been oversold to me.
With a price-to-earnings (P/E) ratio of 6.6, the shares are certainly cheap. Legal & General also has a mouth-watering dividend yield of 9.5%.
Therefore, the pullback represents a great opportunity for investors to consider.
Halma (LSE:HLMA) is a global group of safety equipment companies. It makes products for hazard detection and life protection.
What makes it stand out is its ability to keep increasing profit over time. Halma has acquired roughly 45 companies and has ensured their profitability.
In fact, overall growth for the company remains strong in 2023. Revenue has increased from £1.53bn in 2022 to £1.85bn this year. This has also been translated to operating profit, which has risen from £278.9m to £308.4m in the same period.
This is a display of a pretty robust business that is still growing in these tough economic times.
However, investors should consider that even though Halma has historically grown strongly, it doesn’t necessarily mean this will continue in the future.
With that being said, its shares have dropped by 11.6% over the last year. This could be a potential opportunity that investors should take note of.
Hargreaves Lansdown (LSE:HL) is a financial services company. It sells funds, shares, and related products to retail investors.
What I like about the company is how quickly it’s growing. Between 2019 and 2023, revenue has grown from £480.5m to £735.1m. Profit has likewise risen from £247.6m to £323.7m in the same period.
There is a concern arising from rivals that provide cheaper ways to deal with the products Hargreaves Lansdown offers.
However, I don’t think this is too big a concern. Firstly, Hargreaves Lansdown offers a higher-quality service than cheaper rivals. Furthermore, it has a more diverse range of products that investors can choose from.
What signals to me that its shares have been oversold is how they have fallen by 18.6% in the last year.
With a dividend yield of 5.5%, Hargreaves Lansdown shares also give investors a great way to make passive income.
Therefore, it is definitely a share that investors should consider.