It’s been proven down the years that you don’t have to spend a fortune in order to make a fortune with UK shares. The long-term investor makes an average annual return of somewhere between 8% and 10%. That means individuals who can invest a decent sum of money regularly can make delicious, life-changing returns.
Even investing just £300 a month can set you up for a very handsome retirement. Someone who spends this on UK shares can, over the space of 30 years, realistically expect to have made up to £619,000 for their retirement pot. This is why I invest in my Stocks and Shares ISA at every opportunity.
3 top stocks on my ISA watchlist
Now let me talk you through several cheap UK shares I’m thinking of adding to my ISA today:
- Plenty of housebuilders are trading on cheap price-to-earnings (P/E) ratios right now as investors fear a prolonged economic downturn in the UK. And I think that Springfield Properties’ low reading of 8 times for 2020 more than bakes in the possibility of a big hit to the housing market. In reality though, I don’t think investors need be too concerned over a sudden worsening in trading conditions. Low interest rates and huge government support for buyers look set to prohibit any chances of a collapse in the medium term. Meanwhile, a shocking lack of new and existing properties entering the market will keep demand for Springfield’s newbuilds on an upward slant too.
- Gamesys Group also looks too cheap to miss right now. I don’t believe a forward P/E ratio of 10 times reflects the rate at which the online gambling sector is set to grow. According to Grand View Research, compound annual growth for this market will be at 11.5% through to 2027. And popular brands such as Jackpotjoy and Virgin Games will allow Gamesys to exploit this trend to the fullest.
- Premier Foods is another terrific buy for value investors today. This UK share trades on a P/E ratio just below the bargain-basement threshold of 10 times. It’s a reading that fails to factor in the food producer’s exceptional defensive qualities that make it a great buy for these economically-troubled times. This low rating also doesn’t take into account its packed stable of beloved products such as Mr Kipling cakes and Bisto gravy, brands that should drive profits long into the future.
Discover more dirt-cheap UK shares with the Fool
These are just a few of the top-class UK shares that are changing hands too cheaply right now. The stock market crash of early 2020 leaves plenty of companies trading on attractive multiples today. But the likes of Premier Foods show that many UK shares that have actually risen in value still look too cheap to miss.
So what are you waiting for? By doing a little research you can discover even more cut-price corkers to buy for your stocks portfolio. And The Motley Fool and its huge library of free and exclusive reports can help you find some of these winning UK shares too.
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.