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I’d invest £10k in these cheap UK shares right now to make a million

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Despite the sharp rise in global stocks, there are still plenty of bargains to be found in the FTSE 100. Focusing on cheap UK shares is a tried and tested way of building serious wealth. It could even boost your chances of building a six-figure portfolio. For example, an 8% return over 35 years on a monthly investment of £500 would get you £1,078,202. Here are two I’m keeping my eye on that I reckon could deliver such returns.

Informa: too cheap to ignore?

Informa (LSE: INF) is an international events, intelligence and scholarly research company. Operating through five divisions, the group is headquartered in London with offices in 43 countries around the world.

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Right now, I think Informa looks like a bargain. In the depths of the market crash, the company’s share price plunged by 54% to 363p. Since then, it hasn’t experienced the sharp rise that many other companies listed in the index have. In fact, the shares are still down by 49% since the start of the year, trading at just 432p.

The impact of the coronavirus pandemic on the underlying business was substantial. Informa’s events division was forced to shut down completely, which was always going to be damaging given it’s responsible for around 65% of revenues. That said, in a trading update last month, group CEO Stephen Carter outlined plans to provide alternate digital services as an alternative.

Furthermore, the company’s subscriptions business continued to perform resiliently throughout the global pandemic, with consistent renewals and steady growth.

Key to unlocking Informa’s share price growth will be getting the events business back up and running. Plans are in place to run a number of major events in China from early July, including the China Beauty Expo in Shanghai.

With activity beginning to pick up pace, Informa’s outlook is improving. A forward P/E ratio of 8.2 makes me think that the shares are simply too cheap to ignore.

Another cheap UK share

I’m also eyeing up cyber security firm Avast (LSE: AVST). The company’s antivirus applications are available across all major operating systems and are becoming increasingly popular in an age of digital security.

Since its 2018 IPO, Avast’s share price has been on a near constant upward trajectory. When the major sell-off struck in March however, the company’s valuation tumbled 43% and the shares briefly traded at 310p. Unlike Informa though, Avast soon recovered its pre-crash valuation and the shares trade at 594p at the time of writing. That’s up 19% since the beginning of 2020.

With that in mind, you may be wondering why I’m still classifying Avast shares as cheap? Well, it’s all to do with the company’s strong financials and bright future outlook.

Avast has over 435m active users already and is seeking to expand its customer base even further. Additionally, the company has a strong and liquid balance sheet. Earnings have been growing at an impressive rate, with revenues of $873m generated in 2019. Moreover, some analysts estimate 2020 revenues to be around the $896m mark, illustrating the company’s strong performance amidst a global pandemic.

Ultimately, I think the firm is perfectly positioned to capitalise on the growing demand for privacy products. As the world continues to become ever-more reliant on technology, companies such as Avast are indispensable in ensuring we stay secure online. As such, a forward P/E ratio of around 22.8 is amply justified in my view.

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Matthew Dumigan has no position in any of the shares mentioned. 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.

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