3 cheap UK shares to consider as summer holidays arrive

Will summer bring a new wave of interest in UK shares? Trading typically subsides as people take leave, but I think these shares could benefit.

| More on:
Young female couple boarding their plane at the airport to go on holiday.

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.

UK shares are on the up, with the FTSE 100 closing higher every year since Covid. Performance slowed recently as the general election approached but overall sentiment for the second half of 2024 remains positive.

This suggests there may still be some cheap buying opportunities to consider in our local market. Here are three shares that I think will enjoy growth this summer.


WHSmith (LSE: SMWH) has yet to recover its pre-Covid highs so a busy summer may just be what it needs. The high street newsagent and travel retailer recently expanded the number of stores in stations and airports. With travel expected to increase during the summer holidays, these stores are bound to enjoy increased foot traffic. 

Yet the retailer may want to focus on debt repayments. At £481m, its debt is higher than both cash and equity. The interest payments are sufficiently covered for now but it would have more money to play with if it reduced its debt. If summer doesn’t give it the boost it needs, further price growth could be throttled.

Since July 2021, the share price fell 30% but analyst forecasts remain favourable. Earnings are expected to grow at a rate of 24.7%, giving it a price-to-earnings growth (PEG) ratio of 0.9. And return on equity (ROE) is forecast to be a very promising 27% in three years.

Wizz Air

With the UK set for one of the wettest summers yet, punters will be fighting for cheap tickets to sunny European shores. The younger sibling of the UK’s cheap airlines, Wizz Air (LSE: WIZZ) continues to operate in the shadow of easyJet and Ryanair. It might struggle to compete with Ryanair’s prices but its customer service is more highly rated. And with a price-to-earnings (P/E) ratio almost half that of easyJet, it’s got far more room to grow. 

But that’s not all — future cash flow estimates suggest the current share price could be undervalued by almost 75%. My only concern is the €1bn in debt it holds – far higher than its €145m in equity. While cash reserves are sufficient to cover it, the cost required to reduce that load could limit funding for future expansion. Let’s see if summer can bring it some relief.

Pets at Home

One of the UK’s favourite success stories, this beloved pet store enjoyed spectacular success during Covid. Bored homeowners turned their attentions to their pets during lockdown, ordering toys and pampering gifts from the Pets at Home (LSE: PETS) online store.

However, as life returned to normal and the home office dream died, playtime ended. The shares are now down 43% since the September 2021 high. What’s more, its success has attracted competition and fickle consumers may stray, so Pets at Home might need to slash its high prices to retain business. In May 2023, it launched a bold rebranding strategy but the price has slid 20% since. While the economy may be partly to blame there’s also little evidence the plan worked.

Yet people still have pets and what better time to pamper them than summer? So with the economy recovering and the share price back at pre-Covid levels, business should return to normal. The stock was already doing well pre-pandemic so there’s every reason to believe it could resume that success.

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.

Mark Hartley has positions in easyJet Plc. The Motley Fool UK has recommended Pets At Home Group Plc and WH Smith. 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

Could this beaten-down UK growth stock be the next Rolls-Royce?

Mark Hartley feels Rolls shares have had their time and are running out of steam. Now he’s searching for the…

Read more »

Person holding magnifying glass over important document, reading the small print
Investing Articles

Down 10% in a month! What’s gone wrong with the BAE Systems share price?

Harvey Jones suspected all was going a bit too well for the BAE Systems share price. Things went wrong immediately…

Read more »

Young Asian man drinking coffee at home and looking at his phone
Investing Articles

Are BT shares still a bargain after climbing 30%?

BT shares are finally showing signs of life after years in the doldrums. Harvey Jones thinks this may point to…

Read more »

Investing Articles

£10k in an ISA? Here’s how I’d aim to generate a ton of passive income

I dream of escaping the shackles of a salary with financial independence and a steady stream of passive income. Here’s…

Read more »

Investing Articles

Are Burberry shares a bargain or a value trap?

Appearances can be misleading in the stock market. Shares that look like a bargain can turn out to be a…

Read more »

Investing Articles

How I’d target £17,673 passive income with just £100 a week

Our Foolish writer explains how he’d build a portfolio capable of generating a life-changing passive income with limited capital.

Read more »

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

If I’d put £20k into a FTSE All-Share tracker fund 10 years ago, here’s what I’d have now

A lot of UK investors have money in FTSE All-Share tracker funds. Here, Edward Sheldon looks at how these products…

Read more »

Investing Articles

How I’d invest £10k in a SIPP to target £28,000 annual passive income

Investing just £10k today in a SIPP could be the key to a chunky retirement income in the long run.…

Read more »