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This UK stock just fell 33%! I think it’s one of the best shares to buy now

Compass pointing towards 'best price'
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The share price of financial trading firm CMC Markets (LSE: CMCX) has fallen 33% in a week. Although some caution’s justified, I think CMC’s fallen too far. I reckon this could be one of the best shares to buy now, so I’m thinking about adding the stock to my portfolio.

I’m also going to take a look at a second unloved stock that’s caught my eye this week. This industrial group’s lost 25% in under one month, but I think it could be a good long-term buy.

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What’s gone wrong?

But back to CMC. On 2 September, the business cut its revenue guidance for this year by around 20%. The company says calm conditions in the stock market during July and August caused client trading activity to slump.

It’s not good news, but I don’t think it’s a big surprise either. CMC and its rivals have enjoyed record trading conditions over the last year, due to volatile markets and fast-rising share prices.

Those conditions were never going to last forever. But with the shares now trading 16% lower than one year ago, I think there’s an opportunity here.

Are CMC shares a best buy now?

Broker consensus forecasts for CMC’s earnings this year have now been cut by around 20%. However, the shares have now fallen by almost 50% from the record high seen in April and are 30% lower than at the start of September.

The main risk I can see is that the group’s profit slump will be worse than expected. CMC’s headcount has risen over the last year as the group’s expanded. If market conditions stay calm, the company might need to cut back.

However, CMC’s share price crash has left them trading on just nine times earnings, with a dividend yield of 5%. I reckon that’s too cheap.

Indeed, I think these reduced profit forecasts could turn out to be too low. If we get a bout of volatility or a market correction this autumn, profits could bounce back. Overall, I’d be very happy to buy CMC shares for my portfolio at current levels.

A long-term bargain?

And now for that second unloved stock. Luceco (LSE: LUCE) isn’t a household name, but many of us probably have some of its products installed in our home or workplace. This industrial group makes LED lighting and electrical fittings widely used by electricians.

Luceco’s performance has been stunning in recent years — profits doubled last year and are expected to rise by a further 10% this year. However, rising raw material costs and supply chain difficulties are having an impact on profit margins.

Management hopes these cost pressures will be offset by higher sales, but the market seems to have taken a different view.

Luceco’s share price has fallen by more than 20% since the company’s half-year results were published last week. Investors appear to be pricing in a slowdown.

In the short term, I agree this business faces some headwinds. But as a long-term investor, I can see an opportunity here.

Luceco enjoys high profit margins and strong demand for its products. The group is also expanding into new areas, such as electric vehicle charging. I think this stock’s slump could make it one of the best shares to buy now. I’m certainly considering adding a starter position to my portfolio.

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Roland Head 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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