Today, I’m looking at three cheap UK shares I think could be too good to miss.
#1: Riding the construction boom
Soaring construction activity in Britain is setting building services group TClarke (LSE: CTO) up for strong earnings growth. City analysts think annual earnings here will rocket 50% in 2021 and 37% next year.
This leaves the company trading on a forward price-to-earnings growth (PEG) ratio of just 0.2. A reading below 1 suggests a UK share could be undervalued by the market.
New order volumes across the construction sector grew at their fastest rate in May since records began in 1997, IHS Market said last week. It’s an uptick which Tclarke, which provides a broad range of services across the industry, is well-placed to gain from.
Remember though, this cheap UK share’s operations are highly cyclical. And so a fresh downturn in the domestic economy could blow those upbeat forecasts wildly off course.
#2: An emerging market star
I reckon value hunters like me should give TBC Bank Group (LSE: TBC) a close look today. The FTSE 250 firm is expected to record an 81% earnings uplift this year, resulting in a forward PEG multiple of 0.1.
On top of this, the cheap UK share sports a monster 4.2% dividend yield. It’s a reading that smashes the broader 3.5% forward average for British shares.
TBC Bank’s a great way to ride the strong rebound in Georgia, an emerging market economy which has experienced stunning growth in recent years.
Indeed, just last week, the government there hiked its 2021 GDP growth estimate to 6.5%. It’s tipping growth of 6.9% in 2022 too.
Pleasingly for TBC Bank and its peers, Georgia’s central bank has undertaken a series of interest rate hikes in 2021. This widens the difference between what financial services firms can offer borrowers and savers, thus boosting net interest margins.
But be aware that a fresh uptick in the Covid-19 crisis could see rates slashed again in a bid to support the Eurasian nation’s economy.
#3: Another cheap UK dividend share
I think Sylvania Platinum (LSE: SLP) also offers tremendous value at current prices. Not only does this precious metals miner trade on a forward PEG ratio of below 0.1, but City brokers also expect dividends to keep growing as earnings are tipped to rocket (a 174% bottom-line rise is currently forecast). Thus, the cheap UK share boasts a 4.6% dividend yield.
I like Sylvania because prices of its metals are benefitting from extreme investor jitteriness during this economic recovery. The World Platinum Investment Council recently announced that the platinum market remained in deficit during the first quarter “as strong industrial, automotive and jewellery demand and sustained investment demand for platinum outstripped recovering but constrained supply.”
It’s true that mining metals can be fraught with massive operational risks that could hit revenues and cause costs to balloon. But I still think Sylvania could be considered too cheap to miss at current prices.