The stock market crash has caused many UK shares to experience significant declines in their prices. While this may dissuade some investors from buying them, they could offer impressive long-term recovery potential as the prospects for the economy gradually improve.
With that in mind, here are two FTSE 100 shares that appear to offer wide margins of safety. Their sound strategies could make them worthy of investment in a tax-efficient account such as an ISA. Over time, they could improve your prospects of retiring early.
A declining bank in the stock market crash
Among the biggest fallers in the 2020 stock market crash have been banking shares such as Lloyds (LSE: LLOY). Its share price has declined by 55% since the start of the year as investors have become increasingly cautious about the prospects for the UK economy.
However, the company could outperform many of its sector peers as it invests in digital growth. For example, in its first-half results it reported that it now has 17m digitally-active customers. Moreover, it reported record high digital customer satisfaction ratings. This could help to differentiate it from its peers.
Lloyds also reported that it has maintained a disciplined stance on costs. Meanwhile, an improving outlook for retail spending and the housing market could help its share price to recover after the stock market crash. Having fallen heavily this year, it now appears to offer a wide margin of safety.
A global consumer brand with growth potential
Another UK share that has declined in the stock market crash is Burberry (LSE: BRBY). Its share price is down by 37% since the start of the year, with its first-quarter trading update highlighting store closures and lower demand from the overseas travel sector.
Despite this, Burberry’s strategy could allow it to produce share price growth over the long run. It continues to invest in sustainable fashion, which could broaden its appeal to a younger demographic. It is also becoming increasingly digital, while its new products have proved popular among new and existing customers under a revised design direction.
With Burberry having a strong brand and solid financial position, its shares appear to offer a wide margin of safety relative to its industry peers. As such, it could deliver improving share price performance versus other UK shares.
The prospects for UK shares
Of course, UK shares such as Lloyds and Burberry may experience further volatility in the short run. There is even a threat of another stock market crash over the coming months.
However, for long-term investors, their recent share price declines suggest that they offer good value for money. Therefore, buying them now in a tax-efficient account such as a Stocks and Shares ISA could allow you to take advantage of the stock market’s recent decline to improve your chances of retiring early.
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Peter Stephens owns shares of Lloyds Banking Group. The Motley Fool UK has recommended Burberry and Lloyds Banking Group. 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.