Here are three of the best cheap UK stocks I’d happily buy for my Stocks and Shares ISA today.
A FTSE 100 star
DS Smith (LSE: SMDS) is a UK share that already sits proudly in my shares portfolio. And, at current prices, I’m thinking of buying more, especially as the boxbuilder trades on a forward price-to-earnings growth (PEG) ratio of just 0.6. A reading below 1 suggests a stock might be undervalued.
I think DS Smith is one of the best stocks to buy to ride the e-commerce phenomenon. Its packaging is essential in getting goods from businesses to customers in good shape. And it’s a sector of the market in which the FTSE 100 firm is expanding to boost future profits growth.
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Furthermore, I also like DS Smith’s important role in the rapidly-expanding, fast-moving consumer goods (FMCG) market. The FMCG and e-tail markets collectively make up around 85% of DS Smith’s total turnover. I think the Footsie company’s a great buy despite the threat posed by rising paper prices right now, not to mention a shortage of raw materials due to the e-tail explosion.
One of the best retail stocks to buy?
The problem with penny stocks is that they can be prone to moments of extreme share price volatility. As a long-term investor though, this isn’t something that worries me when I’m searching for stocks to buy. In fact, a lot of UK penny stocks are underpriced gems that the market hasn’t noticed, giving eagle-eyed investors a chance to nab a bargain (or two).
N Brown (LSE: BWNG) is one of these that’s grabbed my attention, a clothing retailer that trades on a forward price-to-earnings (P/E) ratio of just 8 times. This sits inside the widely-accepted bargain benchmark of 10 times and below.
It’s true the fashion retail segment is immensely competitive, posing a risk to N Brown’s future profits. There’s also a risk that its fashion offer could fail to match consumers’ tastes. But I’m confident the company’s focus on the plus-size and older consumer segments, as well as its e-tail-only model, should still underpin strong profits growth in the years ahead.
Animal magic
I also think Pets at Home (LSE: PETS) is one of the best stocks to buy to ride the surge in animalcare-related spending. I own shares in veterinary care specialist CVS Group to ride this trend. But I think buying this FTSE 250 company is similarly good idea.
Competition in Pets at Home’s core categories is high. It’s easy enough to nip out to any major supermarket and grab dog food, cat litter, edible treats or whatever else your animal companion wants or needs. But, as the one-stop shop for everything furry-friend related, I think this retailer has what it takes to retain a large share in the growing animalcare market.
Today, this UK retail share trades on a forward PEG ratio of 0.9 and this makes it a great ISA buy, in my opinion.
