UK stocks have had a good run over the last few months. Since the stock market began rebounding from the Covid-19 sell-off in late March, many stocks have risen 50%, 100%, or more.
There is still plenty of value to be found within the market, however. Here’s a look at five exciting FTSE small-cap stocks that I think look cheap right now.
Cheap FTSE small-cap stocks
One FTSE stock that stands out to me as cheap at the moment is Clipper Logistics. It’s an innovative logistics company that offers a wide range of services, including warehousing, delivery, and returns management. Its customers include the likes of ASOS, Asda, and PrettyLittleThing.
Clipper has grown rapidly in recent years (three-year revenue growth of 60%) and I see the potential for plenty of growth ahead. Recently, the company said it expects to benefit from evolving trends in the retail sector as Covid-19 accelerates the shift to e-commerce. The stock is not expensive, however. Currently, CLG shares trade on a forward-looking P/E ratio of 17. I think that’s an attractive valuation.Â
Operating in a similar field is Urban Logistics. It’s a real estate company that invests in urban warehouses. These are designed to help businesses operate their distribution networks smoothly.
Urban Logistics has grown its top line by nearly 450% over the last three years, and this year, analysts expect top-line growth of 67%. You don’t have to pay a premium for this growth though. Currently, SHED shares trade on a forward-looking P/E ratio of just 18.3.
Another FTSE company that could benefit from the growth of online shopping is Macfarlane. It’s a leading packaging distributor that serves more than 15,000 businesses across the UK, Europe, and the USA. Its customers include Argos, Acer and Selfridges.
Macfarlane supports companies in a wide range of growing industries including internet retail, consumer goods and healthcare. So I expect it to generate solid growth in the years ahead. The stock currently trades on a forward P/E ratio of just 8.9, which I think is a steal.
Turning to the financial sector, one stock that stands out to me as a bargain is AFH Financial Group. It’s an under-the-radar wealth management company that has assets under management of around £6bn.
AFH has grown at an impressive rate over the last five years, registering top-line growth of nearly 400%. Analysts expect the FTSE company to continue growing at a solid clip in the years ahead. The stock’s valuation doesn’t reflect this growth, however. Currently, the shares can be picked up on a forward-looking P/E ratio of just 10.9. I see that as top value.
Finally, I also like the look of Alpha FX right now. It’s an innovative FTSE AIM 100 company that provides foreign exchange (FX) hedging services to small- and medium-sized businesses.
Alpha FX is a highly profitable company that has grown at a phenomenal rate recently. Over the last three years, revenue has increased by 320%. I expect demand for its services to remain strong going forward.
AFX shares currently trade on a forward-looking P/E ratio of 21.4 using next year’s EPS forecast. That’s an attractive valuation, in my view.