I’d spend £5k on these 2 cheap UK shares in my ISA for 2021!

I think these UK shares could soar in value in 2021. Here’s why I’d buy them today in my Stocks and Shares ISA. Come and take a look!

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2020 has been one of the most difficult for UK share investors in recent memory. The coronavirus outbreak, which caused the stock market crash of late February and early March and the subsequent collapse in the global economy, gave stock pickers enough to worry about this year.

But tit-for-tat arguing over trade tariffs, ongoing Brexit-related chaos, and the added threat of political chaos in the US hasn’t done investor confidence a favour either.

Share market performance in 2020 could have been a lot worse had it not been for the strong performance of small-cap stocks since the spring. The FTSE 100 is down 13% since trading began on 1 January. The FTSE AIM All-Share index, meanwhile, is up 12%, soaring after the initial stock market crash.

Many professional investors reckon that small- and micro-cap stocks will continue outperforming larger UK shares as we move into 2021. So now could be a great time to buy as hopes of a strong rebound in the global economy grow.

2 too-cheap-to-miss UK shares

Here are a couple of small-cap shares I’m thinking of buying today. Let me explain why I’d buy them for my Stocks and Shares ISA for 2021 and hold them for 10 years at least:

#1: Trifast

Small-cap Trifast makes screws, bolts and fastenings for a huge number of applications. They can be found inside your washing machine, your laptop, your car, even your Covid-19 protective visor. This UK share’s broad exposure to a variety of cyclical sectors puts it in great shape to ride the economic recovery. And its massive geographic wingspan covering Europe, the US and Asia will let it ride the upturn to the maximum. Trifast is expected to return to earnings growth this fiscal year (to March 2021). And it trades on a low forward price-to-earnings growth (PEG) ratio of 0.8 for the rapidly-approaching new financial period. That’s supported by expectations of a 26% profits jump in 2021. And I’m excited by the company’s future profits opportunities as global car demand soars.

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

#2: STV Group

Broadcaster STV Group is in great shape to ride any economic recovery in 2021. History shows us that spending by advertisers recovers very quickly when conditions improve. And this is why City analysts reckon annual profits at this UK share will zoom 20% higher in 2021. But this small-cap isn’t just a brilliant buy for the here and now. I’m also encouraged by the huge investment it’s making in digital and video on demand (VOD), steps that should deliver robust long-term profits growth. Its STV Player service is the fastest-growing VOD platform in Britain today, with online viewing soaring more than 80% between January and October. Today, STV trades on a basement-level forward PEG rating of 0.4. It carries a monster dividend yield a shade below 5% too. This sort of value is hard to ignore.

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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