2 UK shares I’ve been buying this week

From a value perspective, UK shares look attractive. But two in particular have been attracting Stephen Wright’s attention over the last week.

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Compared to their US counterparts, UK shares typically trade at significant discounts. And that can be good for investors looking for stocks to consider buying. 

Finding value in the stock market is about more than price-to-earnings (P/E) multiples. But a couple of UK shares stand out to me as attractive for other reasons. 

Anglo American

The Anglo American (LSE:AAL) share price has been volatile in 2024. That’s mostly the result of takeover interest from BHP waxing and waning at various points.

Should you invest £1,000 in Anglo American right now?

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Created with Highcharts 11.4.3Anglo American Plc PriceZoom1M3M6MYTD1Y5Y10YALL23 Nov 201923 Nov 2024Zoom ▾Jan '20Jul '20Jan '21Jul '21Jan '22Jul '22Jan '23Jul '23Jan '24Jul '242020202020212021202220222023202320242024www.fool.co.uk

While that doesn’t look to be on the cards (for now), the firm’s trying to divest its coal, platinum, and diamond units. This would leave its copper and iron ore divisions.

Focusing its operations in this way increases the risk of a downturn in copper prices. And this is especially significant with the US currently looking to focus on oil and gas over renewables.

There’s not much Anglo American or its shareholders can do about that. But the cash from divestitures should help offset short-term issues and I think the long-term outlook’s promising.

The company’s copper mines have relatively low production costs. And I think this is possibly the most important source of long-term differentiation for a commodities business.

That’s why I’ve been looking to add the stock to my portfolio. When the market-cap falls below £30bn, I think the company’s shares look like good value. 

JD Wetherspoon

The JD Wetherspoon (LSE:JDW) share price has fallen 13% over the last month. The main reason is the UK Budget presents challenges for the company, as well as the wider industry.

Created with Highcharts 11.4.3J D Wetherspoon Plc PriceZoom1M3M6MYTD1Y5Y10YALL23 Nov 201923 Nov 2024Zoom ▾Jan '20Jul '20Jan '21Jul '21Jan '22Jul '22Jan '23Jul '23Jan '24Jul '242020202020212021202220222023202320242024www.fool.co.uk

Higher Employer National Insurance and an increased National Minimum Wage should both increase the firm’s costs. And this isn’t good for a business focused on customer value.

I think however, the market’s overestimating the threat here. Importantly, the challenge isn’t just one for the company specifically, but for the hospitality industry as a whole. 

Having to increase its prices is unwelcome for JD Wetherspoon. But with other firms likely to have to do something similar, I expect it to be able to maintain its competitive position.

It’s easy to overlook the fact the business has been performing well lately. Sales have been increasing while a focus on cutting back on lease costs has caused margins and profits to rise. 

I’m not convinced the market‘s fully appreciating the strength of the firm’s competitive position. And that’s why I’ve been buying the stock for my portfolio. 

A common theme

Anglo American and JD Wetherspoon are very different businesses. But I think they’ve one thing in common, which is that their shares are good value from an investment perspective. 

From my perspective, that’s the most important thing. Value can manifest itself in different ways, whether it’s a potential divestiture or a strong long-term competitive position.

Owning both in my portfolio adds some welcome diversification. And if the share prices stay where they are, I plan on buying more in the future.

But here’s another bargain investment that looks absurdly dirt-cheap:

Like buying £1 for 31p

This seems ridiculous, but we almost never see shares looking this cheap. Yet this Share Advisor pick has a price/book ratio of 0.31. In plain English, this means that investors effectively get in on a business that holds £1 of assets for every 31p they invest!

Of course, this is the stock market where money is always at risk — these valuations can change and there are no guarantees. But some risks are a LOT more interesting than others, and at The Motley Fool we believe this company is amongst them.

What’s more, it currently boasts a stellar dividend yield of around 10%, and right now it’s possible for investors to jump aboard at near-historic lows. Want to get the name for yourself?

See the full investment case

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.

Stephen Wright has positions in Anglo American Plc and J D Wetherspoon Plc. 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.

Pound coins for sale — 51 pence?

This seems ridiculous, but we almost never see shares looking this cheap. Yet this recent ‘Best Buy Now’ has a price/book ratio of 0.51. In plain English, this means that investors effectively get in on a business that holds £1 of assets for every 51p they invest!

Of course, this is the stock market where money is always at risk — these valuations can change and there are no guarantees. But some risks are a LOT more interesting than others, and at The Motley Fool we believe this company is amongst them.

What’s more, it currently boasts a stellar dividend yield of around 8.5%, and right now it’s possible for investors to jump aboard at near-historic lows. Want to get the name for yourself?

See the full investment case

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