Looking for cheap UK shares? 3 top stocks with P/E ratios below 10 I’d buy in an ISA today

The 2020 stock market crash has created a brilliant opportunity for bargain hunters to get rich. Here are three top UK shares on my ISA watchlist.

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Our view on the 2020 stock market crash is clear. At The Motley Fool we believe long-term UK share investors have nothing to fear from market corrections. History shows us that, over a period of years, share markets always come roaring back. Unless you sell your shares during the depths of a correction you should have little reason to worry.

Getting rich after stock market crashes

I’ve continued to buy UK shares for my ISA in 2020 in the hope of repeating their successes. And, if a second stock market crash happens, then all the better. I’ll be able to pick up the companies on my stocks watchlist for even cheaper.

It’s our view, in fact, that stock market crashes provide an excellent opportunity for you and I to make fortunes. During the last major financial crash spanning late 2008 and early 2009 many Stocks and Shares ISA investors went on bargain-buying sprees. And huge number of these made millions as UK shares soared in value as economic conditions improved.

Hand holding pound notes

3 cheap UK shares on my watchlist

Value investors don’t have to wait for another crash in order to grab a bargain though. There are stacks of great UK shares that trade on forward price-to-earnings (P/E) ratios of 10 times and below. Here are a few that have attracted my attention:

  • The long-term outlook for the defence market remains quite robust, but it’s not something which is reflected in Babcock International Group’s share price, in my opinion. Today the FTSE 250 ace trades on a forward P/E multiple of just 5 times. Its decision to axe dividends last month amid recent revenues pressure hasn’t exactly helped demand for the company’s stock. Still, recent contract wins suggest that business is beginning to pick up again. And Babcock can rely on its “substantial” order book to support earnings in the short-to-medium term.
  • Serabi Gold shares look far too cheap given the bright outlook for gold prices. Bullion’s stepped away from recent record peaks around $2,075 per ounce in recent weeks. However, it looks in great shape for another rush higher before too long. Total holdings in gold-backed ETFs hit all-time peaks recently, and I’m backing extreme macroeconomic and geopolitical uncertainty — along with ultra-loose central bank monetary policy — to continue nudging them skywards. Serabi trades on a forward P/E ratio of 10 times, making it a great UK share for value investors to ride the gold train.
  • Buying Tharisa shares is another way to ride strong current demand for precious metals. And I’d argue that the platinum and palladium producer is a great way to ride the eventual economic recovery too. These markets are in deficit and this is likely to worsen once the auto sector recovers and sucks up mountains of metal for the manufacture of autocatalysts. Today, this UK share trades on an earnings multiple of 7 times. But this isn’t the only reason it stands out. At current prices the mining giant also carries a magnificent 13% dividend yield.

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 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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