With a few days until the cutoff, I’m building a list of stocks to buy. I don’t have to actually purchase any shares to utilise what remains of my yearly allowance — just depositing my cash is enough to lock in that tax-free allowance. But I don’t see any reason to delay.

Why? Well recent stock market volatility means a lot of quality stocks are now trading at bargain-basement prices. They may fall in value again. Yet there’s also the chance that I’ll lose a top dip buying opportunity if I don’t jump in today.

Here are two cheap stocks I’m considering before that ISA deadline.

Forterra

Forterra (LSE:FORT) could face turbulence if the Middle East conflict rumbles on. A period of rising inflation and interest rates could have significant ramifications for its construction markets.

But at current prices of 157p, I think the brickmaker could be worth a nibble. This is because, at 0.4, its forward price-to-earnings-to-growth (PEG) ratio is well inside bargain territory of one and below.

Though there’s clear near-term risk, the outlook over a longer time horizon is a compelling one. In particular, the UK government’s plans to build 300,000 new homes a year this decade could supercharge Forterra’s profits. Following recent expansion, it has the scale to fully maximise this opportunity too (its Desford site is the largest brick factory in Europe with annual capacity of 180m clay blocks).

Forterra’s chunky 4.2% dividend yield offers an added sweetener for value investors.

Softcat

Softcat (LSE:SCT) shares have outperformed the broader stock market in recent weeks. This may come as a surprise, given the potential inpact the Middle East war could have on inflation and growth, and by extension cyclical sectors like technology.

So why has Softcat’s share price picked up steam? One reason seems to be that investors are confident the firm can successfully navigate the worst of any downturn. Despite tougher-than-usual conditions, the business lifted profit forecasts for this financial year after reporting a 33% rise in gross invoiced income. This bodes well looking ahead.

The company’s broad IT expertise is still delivering robust sales and earnings growth. But there’s another reason why the FTSE 250 share continues to rise.

Despite its recent uptick, previous price weakness means Softcat’s shares remain eye-poppingly cheap. At £12.15, the forward price-to-earnings (P/E) ratio of 16.7 times is well below the long-term average of 27-28. Could this continue to attract interest from value investors? I think so.

Full disclosure: I already hold this tech in my portfolio. However, its incredible cheapness means I’m considering increasing my own stake before the ISA deadline.

The post Looking for last minute ISA buys? Here are 2 on my radar appeared first on The Motley Fool UK.

Take the following FTSE 100 and FTSE 250 stocks: Forterra (LSE:FORT), Auto Trader (LSE:AUTO), and Greeencoat UK Wind (LSE:UKW). They fell heavily in 2025, but City analysts are expecting them to rebound spectacularly during the next year.

But the question is: are their share price forecasts achievable, or are they just fantasy?

Too bearish

Forterra shares slumped in 2025 on fears of a protracted housing market downturn. Such a scenario could have significant ramifications for brick demand. The company is the UK’s second-largest producer.

Have investors hit the panic button too soon though? I think so. Market uncertainty lingers, but with interest rates falling and mortgage lenders fighting a rate war, I’m confident sales could pick up sharply in 2026.

Strong housing market at the start of the year has fed my optimism. According to Nationwide, average UK house prices rose at their fastest monthly pace since mid-2015 in January.

Eight analysts currently have ratings on Forterra shares. Their average 12-month share price target is 234.5p per share, up 38% from current levels. Combined with expected dividends, this suggests a total return of 43%.

Motoring ahead

Of the three UK stocks discussed, City analysts think Auto Trader will deliver the biggest share price gains between now and early 2027.

Right now 16 brokers have ratings on the online car retailer. Their average price target is 785.6p per share, up 40% from today’s levels. If the company also pays the dividends analysts expect, shareholders could enjoy an overall return of 43%.

What could jeopardise these white-hot estimates? Well consumer spending remains under pressure, which could in turn impact motor sales. There’s also potential sales danger as the number of car dealerships steadily declines, reducing listings potential.

But on balance, I share the City’s bright outlook for Auto Trader and its shares. It enjoys stunning pricing power on its website listings, reflecting its position as the UK’s most popular online car sales platform. And helped by recent acquisitions, it has the chance to supercharge earnings from services (like finance integrations and data analytics).

47% total return?

City forecasts suggest Greencoat UK Wind will also deliver a juicy return over the next year. Three analysts currently have ratings on the FTSE 250 stock. Their average price forecast is 130.7p, up 36% from levels right now.

With expected dividends factored in, Greencoat UK shares might deliver a total 47% return. But what are the chances of this happening?

Like those other shares, I think the odds are pretty good of forecasts being met. Sentiment towards renewable energy stocks remains cautious, reflecting fears over interest rates and rising construction costs.

But I’m confident investor appetite will accelerate again as the Bank of England (likely) keeps cutting rates. There’s also a good chance power generation will be better following 2025’s wind slump, boosting investor confidence.

Trading at a 30% discount to its net asset value of 141.2p per share, I think the company could attract strong interest from bargain hunters.

The post 3 UK shares tipped to return 43% (or more) over 12 months! appeared first on The Motley Fool UK.

30%+ earnings growth

Forterra‘s (LSE:FORT) forward price-to-earnings (P/E) ratio is 18.7 times. This may not look especially attractive from a value perspective. But as I’ll explain, this reading is expected to topple over the next few years, with brokers predicting that profits will take off:

This FTSE 250 company is the UK’s second-largest brick manufacturer by volume. Its sales and profits dropped in recent years as higher interest rates have dampened new home sales.

But earnings are tipped to rebound strongly from 2025 as the Bank of England steadily eases rates and a mortgage market war benefits buyers. In fact, Forterra believes that “brick consumption has the potential to grow at a faster rate than housing completions in the short-term“, given that demand has fallen more sharply than completions in recent years, meaning builders’ stock levels are unusually low.

Sales surging

Latest trading news in May underlined the brickmaker’s enormous near-term growth potential. It said sales were up 22% in the four months to April, the business commenting that “a strong performance in both our Bricks and Blocks and Bespoke Products operating segments“.

The business has invested heavily in three factories to capitalise on the improving housing market and diversify its market offering, too. Its Accrington plant can produce 48m lightweight brick slips per year, targeting the modular construction sector where construction speed and sustainability are key priorities.

It’s also spent £95m to reduce costs and double capacity at its Desford brick factory, to 180m bricks per year. That’s enough to build 24,000 average family homes, the company claims, and puts it in great shape to capitalise on the new housebuilding boom.

Current government plans are for 1.5m new homes to be built in the five years to 2029.

A FTSE 250 bargain?

As I said at the top, current City projections pull Forterra’s forward P/E ratios sharply lower over the next three years. From 18.7 times this year, its multiples plummet to 13.6 times for 2026 and again to 10.2 times.

This is not all that’s caught my eye as a keen value investor. For 2025, 2026, and 2027, its P/E-to-growth (PEG) ratios are 0.6, 0.4, and 0.3, respectively.

Any reading below one indicates that a share is undervalued.

A sudden inflationary uptick that influences interest rates could dent the brickmaker’s touted recovery. So could a fresh downturn in the UK economy. But, on balance, I think the company’s in great shape to deliver strong and sustained earnings growth.

If I didn’t already hold fell brickmaker Ibstock in my portfolio, I’d seriously consider snapping up some Forterra shares today.

The post Looking for cheap growth shares? Here’s one I think investors MUST consider right now appeared first on The Motley Fool UK.

Cohort

One example is Cohort (LSE:CHRT). The company is a collection of six smaller businesses focused on defence technology, specifically communications and sensors. 

With this type of business, demand is highly sensitive to political (in)stability. Obviously, this isn’t under the company’s control and this creates a risk that can’t be ignored.

The firm’s growth strategy however, has been very successful. It looks to acquire businesses that can complement its existing operations and leave current management teams in place.

This is the kind of model that the likes of Diploma and Halma have applied very effectively. And I think investors should keep an eye on Cohort as a business with a lot of potential.

Porvair

I also think filtration equipment manufacturer Porvair (LSE:PRV) is worth paying attention to. Its products help keep aircraft fuel clean and lab samples free from contaminants. 

These industries can be cyclical and this is a risk. With aerospace, for example, investors should pay close attention to the ongoing issues at Boeing and (to a lesser extent) Airbus.

Importantly though, these industries also have high barriers to entry. Both aircraft equipment and laboratory filters need to meet strict quality standards and specifications. 

This means customers have limited (or no) choice when it comes to suppliers and this translates into a lot of pricing power for Porvair. In this regard, it reminds me of Rolls-Royce.

Forterra

Forterra (LSE:FORT) is a straightforward business – it makes bricks. And a combination of efficient manufacturing and UK-based production helps it maintain lower costs than its rivals.

The business is naturally vulnerable to downturns in UK construction output. Furthermore, the debt on its balance sheet has been increasing over the last few years, which creates risk.

On the plus side, the government is aiming to boost housebuilding. And this should mean that demand for bricks is set to pick up before too long.

Lower costs than competitors is a big advantage for any business. It’s the advantage Howden Joinery Group has and I think there’s something similar here.

Off-the-grid

With high-quality shares, it’s often hard to find opportunities in stocks that other investors are looking at. These usually present themselves when the market overreacts to some news.

A bit further off the beaten track, however, there are companies that don’t necessarily get the attention they deserve. And that can mean buying opportunities come around more often. I think Cohort, Porvair, and Forterra are stocks investors should think seriously about buying.

At the very least, they should take a closer look and keep an eye on them going forward.

The post 3 little-known UK shares for investors to consider buying appeared first on The Motley Fool UK.

Sometimes, a business can use its cash in a way that significantly improves its long-term outlook. And in that situation, it’s best for investors if it doesn’t pay it out as a dividend.

Forterra

One example is Forterra (LSE:FORT), which I used to hold. The stock has a dividend yield of 1.66%, but I don’t think it should be sending cash out to shareholders at the moment.

The company’s a brick manufacturer and – understandably – has been finding a weak housing market’s bad for business. And this has been showing up on the firm’s balance sheet.

At the end of 2022, net debt was £24m, but this jumped to £117m at the start of 2023 and reached £123m by the end of June. And that’s a lot for a business like Forterra.

For context, the company’s operating income in 2022 – its best year in the last decade – was £72m. So I think it will be a while until the firm’s able to get its balance sheet to 2022 levels.

Given this, I’d rather see Forterra reducing its debt than sending out cash to shareholders. The dividend has been cut substantially, but I’d prefer to have seen it suspended entirely.

The company’s in a cyclical downturn and things are likely to improve by themselves. But paying dividends with debt levels growing substantially isn’t something I like the look of.

Dowlais

Unlike Forterra, I still own shares in Dowlais (LSE:DWL). And despite a pretty attractive dividend yield of almost 8%, I think the company has better uses for its cash. 

The FTSE 250 manufacturer also has a lot of debt on its balance sheet. But it’s planning to sell off one of its divisions, so the cash from that could be used to strengthen the financial position.

Right now though, I think Dowlais shares are incredibly cheap. And that means I’d rather the firm used its excess cash for share buybacks, rather than dividends. 

If the share price stays where it is (or anywhere near it) I’m expecting to reinvest the next dividend I receive. At today’s prices, I’d like to own more of the company. 

But it’s more efficient for this to happen by Dowlais buying out other shareholders. And in fairness, the company has been doing this over the last few weeks and months. 

From my perspective, buybacks make a lot more sense for investors with the stock at its current levels. So I’d rather see the cash go there. 

Long-term investing

Sometimes, the best thing for a company to do with its cash is return it to shareholders as dividends. But this isn’t always the case.

When a business has a better opportunity, I want to see management taking it. Ultimately, that’s what is going to determine the success of my investment.

In the right circumstances, I’m very happy to do without dividends in the short term if it means I’ll get more in the future. That is – after all – what investing is all about.

The post 2 UK shares I wish DIDN’T pay dividends appeared first on The Motley Fool UK.

But one of the biggest winners could be a UK stock that isn’t part of either index. Forterra (LSE:FORT) is a brick manufacturing company with a market cap of £380m.

Supply and demand

As part of its manifesto, Labour has promised to tackle the state of housing in the UK. A big part of this is the building of 1.5m new houses over the next three years. 

That’s an average of 500,000 a year – far more than the 212,570 built in 2022/23. Those houses aren’t being built out of LEGO – it’s going to take a lot of real bricks.

The UK already suffers from undersupply in terms of production. And with bricks being heavy and expensive to ship around, there’s an advantage for domestic manufacturers.

That should be good for brick companies across the board, including Ibstock and Michelmersh. But I think Forterra’s recent investments mean it stands to benefit the most.

A commodity business

I think bricks are something of a commodity. People mostly don’t much care about who makes their bricks or where they come from – they care more about what they have to pay.

That means the most important thing is to be able to produce bricks at a low cost. And Forterra’s recent investments give it an advantage here. 

The company opened a new facility in Desford last year, improving both its scale and its efficiency. That should give it an advantage in a commoditised business. 

Falling construction output over the last year made Forerra’s investment look like a mistake. But the company might have positioned itself for very well for a boom in housebuilding.

What are the risks?

There are two main reasons to be sceptical of this idea. One is the targets for new houses look ambitious and the second is the company has made some bad mistakes recently.

The previous government aimed to build 300,000 new houses a year, but came up well short of this. That makes a target of 500,000 seem quite optimistic. 

Moreover, Forterra has done some significant damage to its balance sheet lately. The firm has taken on debt to cope with the downturn in construction. This will have to be repaid. 

To some extent, this is unsurprising for a business in a cyclical industry. But Forterra has done this while paying dividends to shareholders, which seems difficult to justify. 

Is this a buying opportunity?

I own some of the shares in my portfolio and the share price has responded positively to the election result. That gives me something of a dilemma. 

If the UK is really going to build 500,000 new houses annually, the company stands to do very well. But if it isn’t, the rising share price might be a chance for me to sell.

That’s the dilemma with Forterra shares. But with the stock 40% lower than it was five years ago, there could still be a buying opportunity here.

The post 1 FTSE AIM stock that could thrive under the new Labour government appeared first on The Motley Fool UK.

A disappointing set of results has caused the share price to fall by 10% over the last month. I was happy buying the stock at £1.84 – suddenly the shares are at £1.57 and I’m not so sure.

What’s happened?

It’s no secret that housebuilding activity’s been dampened over the last year by high interest rates. And Forterra’s results reflect this, with revenues down 24% and earnings per share down 57%. 

As a Forterra shareholder, I don’t have much of a problem with this. The business operates in a cyclical industry and there isn’t much that management can do about this. 

The downturn in the construction industry’s been having an effect on the company’s balance sheet though. The company’s net debt’s gone from £6m to £93m over the last 12 months. 

I think this is why the company’s lost around £38m in market-cap over the last month. It’s a big increase and it has me concerned.

Debt issues

Three things are bothering me about Forterra’s debt. One is the amount – £93m’s a lot for a company generating £44.1m in EBITDA – and it will have to be paid back sooner or later. 

Another is the fact the company’s felt the need to relax its debt covenants. To give itself some headroom, Forterra’s asked to change the required debt limit from three times EBITDA to four. 

Possibly the biggest issue I have though, is that the stock’s still paying a dividend. With debt rising, I’d much rather management cut the dividend entirely and restored strength in its balance sheet.

I’d rather Forterra prioritised getting in position for when housebuilding activity starts to pick up. But the company seems to be focused on paying a dividend, which is why I’ve stopped buying.

Should I sell?

As I see it, the underlying business has changed from where it was a year ago in ways that go beyond the usual cyclical ups and downs. With that in mind, should I consider selling my stake in Forterra?

I’m not ruling out selling, but I still like the long-term outlook for the company. The shortage of houses – and the bricks needed to build them – is the reason I was first attracted to the stock. And that’s still the case.

As a result, I still think Forterra shares can be a good source of income for an investor over the long term. But I see the short-term commitment to the dividend as a drag on the long-term returns.

With where the stock is at the moment, I’m not inclined to either buy it or sell it. But that could change in the future, depending on where the share price goes from here.

Hold

For me, the situation with Forterra shares is simple. I’ll consider selling them if the price goes up a lot and I’d be willing to buy more if the next move is significantly down.

Right now though, my estimation of the intrinsic value of the business is lower than it was. So while I was willing to buy the stock at £1.84 a month ago, I’m not so keen today at £1.54.

The post I bought this income stock at £1.84. So why am I not buying it at £1.57? appeared first on The Motley Fool UK.

Next year, the threshold for dividend tax is set to fall from £1,000 to £500. And I think this could have significant implications for investors over time.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

Dividend tax

UK investors can earn up to £1,000 a year in dividends without paying tax on them, but that’s coming down to £500 from April. Above that, the tax rate is 8.75% for basic rate taxpayers like me.

With investments held in a Stocks and Shares ISA, there’s no limit to the amount of dividend income someone can earn without paying tax. For long-term investors this could be important.

Right now, a number of stocks have eye-catching dividends. Suppose, then, that I invest £20,000 in shares with an average dividend yield of 5% and earn £1,000 a year as a result.

If I hold my investments in a Stocks and Shares ISA, I’d pay nothing in dividend tax. But from April if I held them outside that, I’d pay £43.75.

Compounding

That doesn’t sound like a lot, but it adds up over time. Over 25 years of investing, £43.75 a year adds up to £1,093.75 in missed income – but the situation is actually worse than this. 

Not only would I miss out on the income I paid away as tax, I’d also miss out on the opportunity to invest it to compound my returns. And investing £43.75 a year for 25 years results in £2,274.

That’s £2,274 I could have had just by using a Stocks and Shares ISA. I wouldn’t have had to do anything else differently, just buy the same stocks and hold them in a tax-advantaged account.

To me, that makes the case for using a Stocks and Shares ISA to invest extremely strong. And a 5% dividend yield looks highly achievable to me with the state of the stock market at the moment.

A 5% dividend yield

One stock with a dividend yield over 5% that I like the look of is Forterra (LSE:FORT). The brick manufacturer isn’t big – it has a market-cap of £367m – but it is well-established. 

Forterra’s products include the London Brick, which features in around 25% of the UK’s housing stock. And its operating margins (usually in the mid-teens) seem healthy. 

Investors should be wary of taking the 7% dividend yield as a given with the UK’s low construction output. Since January however, there have been encouraging signs in the property market.

I think Forterra has the balance sheet and the operational discipline to weather a downturn and emerge on the other side. And when it does, I’m expecting it to be a strong source of passive income.

Long-term investing

The difference between investing in a Stocks and Shares ISA and not might seem minimal. But factoring in the opportunity cost of missed compounding means it can add up over time. 

That’s why getting as close as I can to my £20,000 contribution limit is top of my list of ambitions every year. And it’ll be even more important when April comes around.

The post A Stocks & Shares ISA could earn me an extra £2,274 in passive income! appeared first on The Motley Fool UK.

With that in mind, it’s important to think about what the best investment opportunities are at the moment. Fortunately, I think there are some attractive choices for investors to consider.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

Unilever

Unilever (LSE:ULVR) is currently a business at a crossroads. Despite the strength of some of its brands, it has been carrying a lot of dead weight in terms of less profitable franchises.

The company is moving to divest these and focus on its most promising divisions. I think this should pay off for shareholders in the long term, which is why I’d invest £7,000 at today’s prices.

The biggest danger is that switching brands is easy in the consumer products sector. So there’s always a possibility of customers changing to cheaper products.

Divesting weaker brands should allow the company to put more resources into marketing its strongest franchises to help offset this risk. And a dividend close to 4% makes the risk worth it, in my view.

Forterra

Towards the smaller end of the UK market, I think brick manufacturer Forterra (LSE:FORT) operates in an industry with some favourable characteristics and trades at an attractive price.

Despite a cyclical downturn in a recession, the UK has a long-term shortage of housing. And demand routinely outstrips local supply from manufacturers like Forterra, Ibstock and Michelmersh.

Investors should keep an eye on trends in the construction industry – if housebuilding moves to designs that use fewer bricks, this could change things. And that’s a risk with this company.

However, it’s has been investing in its manufacturing efficiency. So I’d be willing to invest £6,000 based on the idea that these will pay off when the UK construction industry improves. 

Berkshire Hathaway

In the stock market, no investment is ever entirely safe. But Berkshire Hathaway (NYSE:BRK.B) is about as safe as it gets, in my view – $167bn in cash protects a company against a lot of problems. 

I’m not expecting the company to get itself into problems though. Its billionaire investor boss Warren Buffett says that the first rule of investing is not to lose money and it’s an approach Berkshire has stuck to.

With subsidiaries operating in regulated industries, such as utilities and railroads, the threat of outside interference is always a risk. And Buffett wrote about this in a recent letter to shareholders.

Ultimately though, I’d back the company to keep growing steadily for decades to come. That’s why I’d be happy to use £7,000 to buy Berkshire Hathaway shares in a Stocks and Shares ISA.

Finding stocks to buy

When I’m looking for stocks to buy, the key attribute on my list is durability. If I’m going to own part of a business for 10 or 20 years, I need to be confident it’s going to still be around then.

With Unilever, Forterra, and Berkshire Hathaway, I’m confident this is the case. That’s why I’d be happy to divide a Stocks and Shares ISA contribution between those companies before the deadline next month.

The post How I’d invest £20,000 in a Stocks and Shares ISA in March appeared first on The Motley Fool UK.

The company’s share price has been under pressure as a result of rising interest rates weighing on demand in the housing market. But the long-term prospects for the business look positive to me and I feel it’s worth investors doing further research.

Dividends

Forterra shares currently come with a 7.5% dividend yield, so a £13,000 investment in the stock would generate around £975 a year – or £81 a month – in passive income. But there’s a catch.

Rising interest rates and slowing demand in the UK housing market have been weighing on the company’s sales and profits. So dividends in 2024 are almost certain to be lower than 2023.

If the dividend is cut in half, that would mean a 3.75% yield at today’s prices. At those rates, a £13,000 investment would return £487 a year, or £40.50 a month.

One way to boost passive income returns is to reinvest the dividends. If I did this at 3.75% a year for 30 years, I’d eventually have something returning £1,417 a year, or £118 a month.

There’s a risk the stock could undperform over the long term if things don’t look up for the business. But as I see it, the likely outlook is much brighter than this. 

Outlook

Forterra shares have been coming through an unusualy difficult time. Interest rates don’t usually increase as sharply as they have done over the last 18 months and this has been a challenge.

As this subsides, I’m expecting demand in the housing market to recover. In fact, this seems to be happening with mortgage rates already even ahead of a Bank of England interest rate cut.

There’s also a long-term supply shortage in the UK housing market (which is why house prices keep going up). And with bricks being expensive to transport, local suppliers like Forterra should benefit.

On top of this, the firm’s costs should be lower going forward. With a new facility at Desborough producing bricks at lower costs, I’m expecting better profitability over the next few decades.

All of this means – I think –  the business is going to pay out more in annual dividends on average over the next 10 or 20 years than in 2024. So I’m not just relying on reinvesting for future growth.

Staying the course

The building industry is highly cyclical, so I’m not expecting the journey for Forterra shares to be smooth. Over time though, I think the general direction for the company is up. 

If the average dividend yield (based on today’s prices) going forward is 5%, then reinvesting would get me to £158 a month comfortably within 25 years.

Ultimately, I think the Forterra share price overestimates the short-term challenges. Passive income will be uneven each year, but I think there will be a lot of it for investors who stay the course.

The post £13,000 in savings? Here’s how I’d try to turn that into £158 a month in passive income appeared first on The Motley Fool UK.