I own these cheap UK shares in my ISA! Should I buy more before the April 5 deadline?

These two top UK shares trade at prices that are far too low, in my opinion. Here’s why I’m thinking of increasing my ISA holdings in them today.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

The economic outlook remains fraught with danger as Covid-19 cases tick up across the world. But I plan to continue buying UK shares for my own Stocks and Shares ISA in the days, weeks and months ahead. Here are a couple I already own and that I’m thinking of buying more of before the April 5 deadline.

A FTSE 100 star

I already have Taylor Wimpey (LSE: TW) shares sitting in my Stocks and Shares ISA. And at current prices I think the housebuilder is one of the best value stocks to buy on the FTSE 100 today. City analysts think annual earnings here will rocket 142% year on year in 2021. This results in a forward price-to-earnings growth (PEG) multiple of just 0.1. This UK share boasts a mighty 5% dividend yield too.

It’s possible that the British economy could be in for a tough time over the next couple of years. The dual problems of Covid-19 and Brexit could well dent demand for Taylor Wimpey’s new-builds. But there are several reasons why I think the homes market can remain robust for years to come.

I expect low interest rates to remain in place as they did throughout the 2010s. This, combined with the increasingly bloody competition between Britain’s lenders, should mean that mortgage products remain ultra-affordable for homebuyers. Massive government support like Help to Buy, and now the 95% mortgage guarantee scheme, should boost interest from first-time buyers too.

Home key with house keyring with calculator.

Another cheap UK share for ISA owners

Taylor Wimpey’s incredible value is making me consider buying more for my Stocks and Shares ISA. But buying the builders themselves isn’t the only way that UK share investors can get rich from the favourable outlook for the housing market. Buying companies that provide construction materials is a similarly-great idea in my opinion.

This is where brickmaker Ibstock (LSE: IBST) comes in. I also own this British stock in my ISA today. Today’s low share price is making me think of increasing my holdings here too. City brokers think annual earnings will almost double in 2021, also leaving the company trading on a forward PEG of 0.1. Any reading below 1 can indicate that a UK share is being undervalued by the market.

Bear in mind though that Ibstock’s profits could also suffer amid a downturn in broader economic conditions and thus a housing market slump. Rising raw material costs and unforeseen production problems could also cause current earnings estimates to miss their target.

I’m looking on the bright side though. And I reckon Ibstock can expect demand for its bricks to continue as British housebuilding activity will hopefully click through the gears. And I’m expecting the business to resume development of its new Atlas factory in the West Midlands soon (the company put the project on hold last year following the coronavirus outbreak). The new site will churn out a mammoth 80m bricks each year.

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 owns shares of Ibstock and Taylor Wimpey. The Motley Fool UK has recommended Ibstock. 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.

More on Investing Articles

Illustration of flames over a black background
Investing Articles

2 red-hot UK growth stocks to consider buying in April

These two growth stocks are performing well, but can they continue to deliver for investors through 2024 and beyond?

Read more »

Charticle

Is JD Sports Fashion one of the FTSE 100’s best value stocks? Here’s what the charts say!

The JD Sports Fashion share price remains a wild ride during the first quarter. Could it be one of the…

Read more »

Investing Articles

Could the JD Sports Fashion share price double in the next five years?

The JD Sports Fashion share price has nearly halved in the past five years. Our writer thinks a proven business…

Read more »

Bus waiting in front of the London Stock Exchange on a sunny day.
Investing Articles

If interest rate cuts are coming, I think these UK growth stocks could soar!

Falling interest could be great news for UK growth stocks, especially those that have been under the cosh recently. Paul…

Read more »

Investing Articles

Are these the best stocks to buy on the FTSE right now?

With the UK stock market on the way to hitting new highs, this Fool is considering which are the best…

Read more »

Petrochemical engineer working at night with digital tablet inside oil and gas refinery plant
Investing Articles

Can the Centrica dividend keep on growing?

Christopher Ruane considers some positive factors that might see continued growth in the Centrica dividend -- as well as some…

Read more »

Smiling family of four enjoying breakfast at sunrise while camping
Investing Articles

How I’d turn my £12,000 of savings into passive income of £1,275 a month

This Fool is considering a strategy that he believes can help him achieve a stable passive income stream with a…

Read more »

Person holding magnifying glass over important document, reading the small print
Investing Articles

2 top FTSE 250 investment trusts trading at attractive discounts!

This pair of discounted FTSE 250 trusts appear to be on sale right now. Here's why I'd scoop up their…

Read more »