53% of investors expect a 2025 bull market! Here’s a cheap UK stock I’m considering

2025 could be another big year for global stock markets. So I’m creating a list of the best UK stocks to buy after New Year’s Day.

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2024’s been a great time for UK stocks after years of disappointing returns. So far, the FTSE 100 is up 6.3%. The FTSE 250, meanwhile, is up 5.8%.

However, these performances pale in comparison to those recorded by major US share indexes. The S&P 500 is up a whopping 27.6% since the start of January.

The continued underperformance of domestic shares means the London Stock Exchange remains packed with brilliant bargains. So I’m building a list of the best ones to buy in the New Year.

Should you invest £1,000 in Begbies Traynor Group Plc right now?

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According to eToro, some 53% of its clients expect the global bull run to continue in 2025. Here’s one UK share I think could soar in value next year.

Setting the scene

Economic conditions remain tough heading into the New Year. According to the Insolvency Service, the number of company insolvencies rose to 1,966 in November, up 13% year on year.

The service expects numbers to remain grisly in 2025 too. It says that “insolvency levels have remained high throughout the course of the year [and] we anticipate them remaining so in 2025 as firms continue to carry unsustainable levels of debt.”

Moderating inflation and falling interest rates are providing support. Yet the upcoming National Living Wage hike and higher National Insurance contributions could offset these positives in the New Year.

A thriving stock

With Britain’s economy also contracting again, insolvency services providers like Begbies Traynor (LSE:BEG) should remain in high demand. Latest financials on 10 December underlined how the Alternative Investment Market (AIM) company is thriving in the current landscape.

Revenues here rose 16% in the six months to October, with sales up 11% on an organic basis. It was market leader in terms of appointment volumes, and the number of higher value insolvency cases at the group increased too.

As a consequence, adjusted pre-tax profit also rose 16% year on year.

Begbies has proved to be a reliable earnings grower over time. They’ve increased in four of the past five years, in fact. It’s a record that looks set to continue, and especially as the firm keeps splashing the cash on acquisitions.

The business snapped up White Maund Insolvency Practitioners earlier this month as part of its ongoing expansion drive. Acquisitions contributed to 5% of revenue growth in the first half.

Undervalued gem

Created with Highcharts 11.4.3Begbies Traynor Group Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

Today Begbies shares trade on a forward price-to-earnings (P/E) ratio of 9.1 times. I think this valuation fails to reflect the firm’s solid progress and its strong balance sheet that should support further M&A.

I also think Begbies’ low rating leaves scope for a share price rebound in 2025.

City analysts expect annual earnings per share to edge 1% higher this financial year (to April 2025) before accelerating to 4% the year after. They’re numbers I believe could be upgraded in the weeks and months ahead.

A sudden upturn in the UK economy could upset Begbies’ earnings growth. Profits could also disappoint if it makes poor acquisitions. But as things stand, I’m seriously considering adding it to my portfolio.

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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.

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Begbies Traynor Group Plc. 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.

Like buying £1 for 51p

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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