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2 cheap UK shares I’d buy for my Stocks and Shares ISA before the next stock market rally

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It was quite a wild ride on UK share markets last week. Pfizer’s announcement regarding its quest for a Covid-19 vaccine set risk appetite across global stock markets on fire on renewed hopes of a V-shaped economic recovery. The FTSE 100 and FTSE 250 surged to their highest since June and March respectively.

It’s far too early to suggest that Pfizer’s concoction will prove to be the magic formula for killing the coronavirus crisis stone dead. Key questions over the efficacy of the vaccine are still to be answered. Still, it’s likely the recent stock market rally will continue during the remainder of 2020, and possibly beyond. A number of other major pharmaceuticals makers are tipped to release positive vaccine testing data of their own before too long.

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Buying UK shares in uncertain times

Further news on a Covid-19 vaccine won’t change my own investing strategy that much though, whichever way it goes. I’ve continued to buy UK shares in my Stocks and Shares ISA despite the threat of a prolonged global economic downturn. And I plan to keep steadily building my shares portfolio as I have been for years now.

Image of person checking their shares portfolio on mobile phone and computer

As a long-term share investor I’m not concerned by temporary choppiness on share markets. I’m also not perturbed by major economic, political, and social developments that rattle the global economy. History shows us that UK shares provide patient investors like me with an average yearly return of 8-10%. Crises like the coronavirus come and go, but they don’t prevent UK share pickers from making big returns over the long run.

2 top ISA buys on my radar

That said, here are two cheap UK shares I’m thinking of adding to my Stocks and Shares ISA today. I think they could soar before too long, so buying today will allow me to lock in this value.

  • Any fresh rally would likely send early-stage cyclical stocks soaring like leisure goods suppliers. One such company on my watchlist is musical instrument and sound equipment seller Gear4music. This UK share offers unmissable value right now, as illustrated by its rock-bottom forward price-to-earnings growth (PEG) reading of 0.2. Even as Covid-19 struck and the economy plunged, demand for its products still soared. These grew 42% in the six months to September, latest financials showed. And they should remain on a heady upward trajectory when broader consumer confidence rises.
  • Legal & General Group is another UK share which should benefit in the early periods of the economic recovery as shopper appetite picks up. And this FTSE 100 stock can expect sales to pick up quite quickly, helped by some unexpected consequences of the Covid-19 crisis. The threat of severe changes to the State Pension following the pandemic should bolster demand for its financial products, for example. Its huge investment in digitalisation should pay off handsomely as well. Today, Legal & General trades on a forward price-to-earnings (P/E) ratio of 7 times. And it boasts a gigantic 9.2% dividend yield. These readings make it far too cheap to miss.

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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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