2 of the best cheap UK shares to buy now!

I’ve been looking for cheap UK shares to add to my portfolio to capitalise on the economic recovery. Unfortunately, after the market’s recent performance, many stocks appear expensive. But there are a handful of names I think are still worth buying. 

With that in mind, here are two cheap UK shares I’d buy for my portfolio right now. 

Cheap UK shares

The first company I’d buy is the broadcaster ITV (LSE: ITV). This firm has had a rough 12 months. Advertising revenues collapsed at the beginning of the pandemic, and the group’s production arm also suffered disruption. As a result, revenues plunged. Management had to eliminate the dividend to save cash and tap government funding schemes. 

ITV made it through the pandemic, and it’s now in recovery mode. Advertising revenues have recovered, and the group is planning a slate of big revenue-generating programmes, such as Love Island and The UEFA European Football Championship, over the next six months. Based on the improving advertising trends seen over the past few months, these could help crystallise ITV’s recovery. 

Even though ITV is heading in the right direction, the stock remains depressed. Uncertainty about the company’s future, and competition from the likes of Netflix, is putting investors off.

There’s still no sight of a return of the group’s dividend. It may never return if the company has to spend more and more to fight off deep-pocketed US peers. This is the most considerable risk the enterprise faces right now. 

Still, despite this headwind, I’d buy the company today for my portfolio of cheap UK shares. I think ITV has fantastic recovery potential. 

Drinking boom 

C&C Group (LSE: CCR), the leading manufacturer, marketer and distributor of premium branded cider, beer, wine & soft drinks, also reported a sharp decline in revenues last year as hospitality businesses across Europe were forced to shut. 

However, it seems as if this trend has reversed this year. Some reports suggest that brewers are struggling to keep up with the demand from pubs as drinkers return. As of yet, it’s unclear how this will impact C&C. But I think the rising tide should lift all firms in the sector. 

Even though all indications point to the fact C&C could see a return to growth in the next 12-24 months, the stock is still selling at a price-to-earnings (P/E) multiple of 11.4. I think that looks cheap. 

That said, this firm may encounter more issues if there’s another coronavirus wave. C&C may struggle to deal with yet another shutdown. There’s also the risk of competition. The company always needs to try and stay one step ahead of the competition, or it could lose market share. 

Even after taking these risks into account, I’d buy C&C for my portfolio of cheap UK shares, considering the firm’s potential.