Soaring expenditure in Britain specifically is what makes STV such an attractive pick, in my opinion. According to marketing strategists WARC: “The UK is on course to achieve the fastest ad trade recovery of any major European market this year, and one of the strongest growth rates across 100 global markets.”

I’m expecting STV to release more sunny financials on the back of this ad market recovery, providing the possibility of a sharp share price rebound. The company’s most recent trading update showed that “advertising trends continue to improve through 2021” and that total advertising revenues were up 32% year-on-year in the first half. Encouragingly, ad sales were also up 5% from the same period in 2019.

Streaming superstar

I don’t just think STV’s a top buy for the economic recovery over the short-to-medium term however. I believe the cheap UK share’s massive investment in the fast-growing ‘video on demand’ (VOD) segment isn’t baked into the current share price of 336p.

Its STV Player platform is the fastest-growing streaming service in Britain, with streams rising 94% year-on-year between January and June. The business just signed its largest-ever content deal to keep VOD viewers switched on too.

I think STV’s one of the best cheap UK shares to buy, despite the intense competitive threat from the likes of Netflix and Amazon’s Prime service and free platforms like BBC iPlayer. City analysts think earnings here will edge 2% higher in 2021 before growth accelerates to 12% next year.

Another cheap UK share on my radar

Bellway (LSE: BWY) appears to be another great bargain for growth and income, now and in the future. City brokers reckon earnings at the housebuilder will soar 117% in 2021 and then rise by an additional 8% next year. This leaves the FTSE 250 firm trading on a forward P/E ratio of just 10 times.

What’s more, at a current price of £35.20 per share, Bellway carries a forward dividend yield of 3.2%. It’s one that smashes the FTSE 250 average of 1.8% to matchwood.

Bellway’s shares have risen strongly over the past year as home sales have rocketed. Still, it continues to command a low valuation as fears over property demand as Stamp Duty is reintroduced persist. This is a real threat but as an investor in the housebuilding sector myself, I continue to find news on this front encouraging.

Latest Halifax data this week showed average home values rise 0.7% in August to fresh record peaks. This was despite Stamp Duty becoming payable again for all properties above £250,000.

I already own shares in Barratt and Taylor Wimpey. And while demand for its new-builds could suffer if the economic recovery stalls, I’m thinking of snapping up Bellway shares too due to its rock-bottom share price.

ITV share price: reasons to be bullish 

Perhaps the biggest reason for me to remain bullish on ITV is that revenue should rebound over the rest of 2021. Encouragingly, this month’s full-year report included mention of “more positive trends in the advertising market in March and April“. Most of its programmes are also back in production. 

Should all go as planned, I can see ITV restarting dividends. This should be a further catalyst for the shares to keep climbing as income investors pile back in. Additional gains could come from the company re-entering the FTSE 100 only a few months after being forced out. Funds tracking the index will be forced to buy the stock whether they like it or not.  

Another opportunity?

ITV isn’t the only value play out there. Industry peer STV Group (LSE: STVG) could also benefit from an ongoing reversal in sentiment. The shares are already up nearly 70% since the end of August. 

Earlier this month, the small-cap said it had achieved a “better than expected” performance in 2020, even though revenue and pre-tax profits were significantly down on the year. On a more positive note, it said online viewing rose 68% over the period. In other news, STV Studios won a record 19 new commissions in 2020 and net debt, excluding lease liabilities, fell 53% to £17.5m. In addition to all this, its also confirmed that it would reinstate dividends.

The most important snippet for me, however, was that advertising trends were “improving materially” in 2021.

Reasons to be cautious

Although bullish on the ITV share price and STVG’s prospects for the rest of 2021, I’m conscious that owning shares in the former may be skewing my opinion. So, let’s look at a few arguments for why things might not go as I think.

One clear objection to continuing to hold either stock now is that people can’t wait to leave their sofas and venture back out. As such, viewing numbers could drop over the remainder of 2021, especially if we get decent summer weather.

Of course, a third wave of the coronavirus would be bad news too and may halt productions again. A related concern comes from the possibility that overseas travel may still be prohibited. If so, travel companies and airlines will be unwilling to spend on advertising. 

On top of this, the competition for viewers won’t get any easier for ITV. Yes, its Britbox service has been well received, but the number of subscriptions pales in comparison to US giants like Netflix and Disney. As mentioned last month, I’m a big fan of the latter.

Solid hold

I’m happy to continue holding my ITV shares. A forecast P/E ratio of 12 takes into account the above concerns, in my view. Meanwhile, STV trades on an even more attractive valuation of 10.5 times projected FY21 earnings. I’d buy with any spare cash.

As long as COVID-19 is eventually sent packing, I’m hopeful investors like me will be rewarded for not selling either too soon.

Why I reckon STV is a FTSE share to buy now

And despite the coronavirus crisis, today’s full-year results report demonstrates progress towards that goal. However, the five-year financial and trading record shows advertising earnings have been patchy. There’s no escaping the large cyclical element in the business. On top of that, the sector is competitive. And the reason STV needs to diversify is to catch up with an audience that is migrating to digital channels leaving the traditional broadcasting operations behind. I see such trends as negatives regarding the case for investing in the shares now.

Nevertheless, today’s figures encourage me. Revenue dipped by 14% compared to the prior year. And adjusted earnings per share plunged 18%. But the net-debt number dropped by 53%. And the directors restored shareholder dividends, saying the move is “a measure of the Board’s confidence in STV’s future growth.”

In 2020, STV managed to generate a third of its operating profit from new revenue streams, so it’s well on the way to the 50% target. Digital revenue rose by 5%. And online viewing rose 68% with revenue via video-on-demand (VOD) lifting 12% during the year. However, total advertising revenue dropped by 10%.

The company also announced new content deals with Sony and eOne. And the studio division won 19 new commissions in the year, despite the pandemic. Meanwhile, in one measure of progress, audiences grew by 14% for STV broadcasting operations and by 83% on the STV Player.

Robust finances

The strong operational and financial performance enabled the company to pay back in full its furlough grant of £1.6m. Happily, STV is one of many publicly listed companies that have been sending coronavirus-related monies back to the nation’s coffers.

Adjusted operating profit came in “well ahead of initial expectations” at just over £18m. But that was still a year-on-year decline of 19%, although there was a “significant” improvement in the second half of the year.

Nevertheless, STV needed to strengthen its balance sheet in the summer of 2020 with a placing raising a gross sum of around £16m. And in early March, the company agreed to a new £60m revolving credit facility.

Looking ahead, the directors reckon the outlook for the business is positive and improving. And I see the stock as one with further to recover following the Covid crisis with the potential for further growth after that if the business can keep on winning digital market share. Although that outcome is not certain.

And I’m not expecting progress to shoot the lights out in the years ahead. STV has been struggling for several years. And the share price has essentially travelled nowhere in the past decade.

But I’m prepared to embrace the risks in the hope the firm will keep hold of its newly discovered growth mojo. With the share price near 335p, the forward-looking earnings multiple for 2021 is just over nine and the anticipated dividend yield is around 3.7%.

Given that forward growth will likely be quite slow, I see the valuation as fair rather than cheap.

#1: A bright UK e-retailing share

I think the booming e-commerce sector makes ASOS (LSE: ASC) one of the best UK shares to buy today. This particular fashion retailer offers a broad range of products and brands across many price points. And it trades across Europe and the US, giving it terrific strength through diversification. What’s more, by focusing on the 20-somethings demographic, it’s centred its operations on the most lucrative group in terms of fashion spending.

Now ASOS’s shares don’t come cheap. City analysts reckon the company’s earnings will rise 13% this fiscal year (to August 2021). This leaves it trading on a high forward price-to-earnings (P/E) ratio of 40 times. Such a vertiginous valuation leaves the stock in danger of a share price correction if trading begins to disappoint.

#2: A brickmaking beauty

British house prices continue soaring at a stratospheric pace as demand keeps on exceeding supply. This means housebuilding needs to pick up significantly in the years ahead. And this bodes well for UK brickmaking shares like Forterra (LSE: FORT).

The government has stepped up attempts to improve construction rates in recent years and homebuilding on these shores hit 33-year highs last year. It’s likely an overhaul of the planning system will help construction activity during the 2020s too.

City forecasts expect annual earnings at Forterra to soar 130% in 2021. Consequently, it trades on a forward price-to-earnings growth (PEG) ratio of 0.2. This sub-1 reading suggests the brick manufacturer could be wildly undervalued today.

Bear in mind though that estimates can miss to the downside as well as the upside. And this can pull share prices lower. Investors like me need to remember too that a bumpy economic recovery could damage demand for Forterra’s products in the short-to-medium term.

#3: A streaming great broadcaster

I also like the look of STV Group (LSE: STVG) right now. This is despite the broadcaster facing significant threats from the likes of Netflix and other major streaming companies, which I have to take into account when considering investing in this stock. The business has pumped huge amounts of money and plenty of effort into developing its own video-on-demand (VOD) capabilities. And this is paying off handsomely. Indeed, streaming via its STV Player platform soared 68% in 2020, faster than any other broadcaster’s VOD service. And the platform’s 12.5m streams in January was up 115% from the same month last year.

City analysts currently think STV’s annual earnings will rise 12% in 2021. As a result, the UK share trades on a forward PEG ratio of 0.9. I think this low valuation, coupled with a bulky 4% dividend yield, makes the broadcaster an attractive stock to buy today.

But tit-for-tat arguing over trade tariffs, ongoing Brexit-related chaos, and the added threat of political chaos in the US hasn’t done investor confidence a favour either.

Share market performance in 2020 could have been a lot worse had it not been for the strong performance of small-cap stocks since the spring. The FTSE 100 is down 13% since trading began on 1 January. The FTSE AIM All-Share index, meanwhile, is up 12%, soaring after the initial stock market crash.

Many professional investors reckon that small- and micro-cap stocks will continue outperforming larger UK shares as we move into 2021. So now could be a great time to buy as hopes of a strong rebound in the global economy grow.

2 too-cheap-to-miss UK shares

Here are a couple of small-cap shares I’m thinking of buying today. Let me explain why I’d buy them for my Stocks and Shares ISA for 2021 and hold them for 10 years at least:

#1: Trifast

Small-cap Trifast makes screws, bolts and fastenings for a huge number of applications. They can be found inside your washing machine, your laptop, your car, even your Covid-19 protective visor. This UK share’s broad exposure to a variety of cyclical sectors puts it in great shape to ride the economic recovery. And its massive geographic wingspan covering Europe, the US and Asia will let it ride the upturn to the maximum. Trifast is expected to return to earnings growth this fiscal year (to March 2021). And it trades on a low forward price-to-earnings growth (PEG) ratio of 0.8 for the rapidly-approaching new financial period. That’s supported by expectations of a 26% profits jump in 2021. And I’m excited by the company’s future profits opportunities as global car demand soars.

#2: STV Group

Broadcaster STV Group is in great shape to ride any economic recovery in 2021. History shows us that spending by advertisers recovers very quickly when conditions improve. And this is why City analysts reckon annual profits at this UK share will zoom 20% higher in 2021. But this small-cap isn’t just a brilliant buy for the here and now. I’m also encouraged by the huge investment it’s making in digital and video on demand (VOD), steps that should deliver robust long-term profits growth. Its STV Player service is the fastest-growing VOD platform in Britain today, with online viewing soaring more than 80% between January and October. Today, STV trades on a basement-level forward PEG rating of 0.4. It carries a monster dividend yield a shade below 5% too. This sort of value is hard to ignore.

There’s more than one way to skin a cat, it’s true. When it comes to share investing there’s many strategies that you and I can use to make a lot of money. One method that’s staring us all in the face today is the opportunity to buy top UK shares that were oversold during the initial stock market crash and which have suffered from anaemic buying interest since.

The success of Stocks and Shares ISA investors during the last decade illustrates just what a powerful ally stock market crashes can be for brave investors. Hundreds and hundreds of ISA owners made millions during the 2010s. How? They bought cheap UK shares in the aftermath of the banking crisis. And then watched them balloon in value as the economic recovery took hold and confidence returned to the markets.

Low P/E ratios AND big dividends

Here are two UK shares I’m thinking of buying for my own ISA. They carry low price-to-earnings (P/E) multiples which provide plenty of scope for serious price gains from now on. And they boast bulky dividend yields too. As a result I think they’re too good to miss:

• NWF Group has a very bright future. It is a major fuels supplier in a hugely-fragmented market. And through its aggressive acquisition strategy it’s taking steps to boost its geographical footprint and supercharge its share. It also has ample room to expand in the fast-growing animal feeds markets. The company’s forward earnings multiple of around 10 times fails to reflect its bright profits picture, in my book. At current prices, it boasts a 4% dividend yield as well. These figures suggest it’s a steal.
• Broadcasting colossus STV Group looks too cheap to miss today too. This UK share boasts a forward P/E ratio of 8 times as well as a near-4% dividend yield. Now could be an especially good time to buy as hopes of a strong rebound in ad budgets grow (former WPP head honcho Martin Sorrell, for one, recently told Barron’s that he expects a “full-throated” recovery in 2021). The accelerating growth of its digital business offers plenty for share investors to get excited about too.

Make a million with UK shares

These are just a couple of the too-cheap-t0-miss stocks available to buy today. The Motley Fool’s epic library of exclusive reports can help you find even more. So do some research and get investing in UK shares today, I say. You could get seriously rich and, like those ISA investors, possibly even make a million.

The broadcaster, like its FTSE 100 cousin ITV, faces a significant drop-off in ad revenues during what will likely prove a painful and prolonged UK recession. Indeed, in March STV declared that previous guidance for regional ad sales to rise by single-digit percentages in 2020 looks “challenging”.

That’s likely to prove something of an understatement. However, STV’s variable broadcast cost base gives it some protection in these tough times. Programming costs account for the lion’s share of total costs. These are costs that tend to move in line with broader advertising revenues. This will help it defend margins in these difficult times.

Small cap, big value

But let’s look beyond the medium term. Like ITV, the Scottish broadcaster is benefitting from changing viewer habits and the move to online. It’s a reflection of the huge investment STV has made in its online capabilities, too. Online viewings of STV’s output surged 80% in the first quarter, picking up the pace from a blockbuster 2019 and helped by the broadcaster taking steps like releasing exclusive content through its streaming services and making its programmes available on new platforms like Apple TV.

This is a small cap that is clearly going places. And current troubles in the ad market represent nothing more than a mere bump in STV’s broader growth story. It currently trades on a forward price-to-earnings ratio of below 8 times, making it a brilliant value pick at current prices of around 240p per share.

Another one to watch

Tyman (LSE: TYMN) is another small cap that looks too cheap to miss today. It hasn’t had the best of things lately, as Covid-19-related lockdowns have smashed revenues (down 39% in April alone) and its factories in Europe have been shuttered. It also faces a slump in demand for its door and window components as a painful global recession will likely hammer construction companies across its territories.

Subsequent share price weakness means that, at current values of 195p per share it trades on a prospective P/E ratio of 10 times. I reckon this represents an attractive level to buy in at.

Tyman has been no stranger to difficult underlying market conditions in recent times. But it has shown that it is capable of outperforming the broader market. It has also proved successful in cutting costs. Both qualities should stand it in good stead for the coming recession.

This sales resilience also reflects Tyman’s active approach to M&A across its US, UK, and European territories in recent years. Its success on the acquisition front has boosted its product portfolio and its route to markets, not to mention building its presence in commercial markets along with boosting its existing position in the residential segment. Such investments should put it near the front of the queue when the upturn in its end markets finally transpires.

I wouldn’t say that STV Group (LSE: STV) is a stock that falls into this category, however. Sure, it trades on a dirt-cheap forward P/E multiple of 8.8 times and boasts a jumbo 5.5% dividend yield. But in my opinion, it’s in great shape to keep growing both profits and dividends long into the future.

A Scottish play

The trading environment isn’t exactly a bed of roses for Britain’s broadcasters right now as advertising budgets remain under pressure. STV itself saw total ad sales tick 0.6% lower in the six months to June. However, the Scottish broadcaster’s resilience right now is nothing short of remarkable and the business expects things to remain so. This is why it predicts total revenues will flatline in the nine months to September versus a 6% to 7% decline for the broader market.

The numbers reflect STV’s decision to focus on the digital and regional ad markets, segments that both delivered sales growth of 19% at the firm in the first half and that should deliver strong revenues expansion once broader conditions in the ad market improve. In the meantime, the small cap can look to the huge investment it’s made in its digital operations and its production arm to keep driving the bottom line.

And City analysts agree. It’s why earnings at STV are expected to rise 7% in 2019 and 14% in 2020, predictions that lead to expectations of more dividend growth over the period too.

Down with Brown

Can it be said that N Brown Group (LSE: BWNG) offers terrific bang for your buck like STV?

City consensus suggests that earnings should keep rising at the clothes retailer over the next couple of years, by 8% and 1% for the years to February 2020 and 2021 respectively. As a consequence, N Brown boasts a bargain-basement forward P/E ratio of 4.8 times.

What’s more, with dividends expected to grow over the period, N Brown’s prospective payout yield sits at a monster 6.5%. On paper, then, the small cap seems too good to be true. And I consider this to be absolutely true – indeed, I reckon there’s a high chance of City forecasters slashing their profits and dividend estimates possibly as soon as 10 October when interims hit the market.

It doesn’t matter that the Simply Be and Jacamo owner has invested heavily in the fast-growing internet shopping segment. N Brown is still toiling amid a broader decline in consumer confidence and in the 13 weeks to 1 June saw total revenues drop 3.8%. I fear what those upcoming six-month results will reveal, given that retail conditions have worsened over the summer.

What makes things doubly difficult for N Brown is that it is also languishing under a hulking great debt pile, one so large that whispers of another painful dividend cut are increasing. The retailer hasn’t been helped on this front either by a recent glut of PPI-related misconduct claims, ones that have prompted it to raise its full-year net debt guidance to £460m–£490m (from £440m–£460m previously).

STV and N Brown might both look great on paper but there’s only one that I’d be happy to stash in my ISA today.

The US business and general aviation market may be crawling rather than rocketing higher, but sales at the flight support services play continue to grow ahead of the broader market. That’s because of the steps it’s taken to improve customer service and build its fixed base operator (FBO) network across the world.

Speaking of which, BBA has shelled out plenty via acquisitions to boost its geographical and operational wingspan, the latest of which in 2018 saw it snap up fuel and fuel-related services provider EPIC to bolster its core Signature FBO division significantly. What’s more, because of its explosive cash generation, the firm’s in great shape to keep investing both organically and through M&A to boost earnings.

Investors assemble

Dividend-seeking bargain hunters should also pay Cineworld Group (LSE: CINE) very close attention today.

As a shareholder of the cinema chain myself, I’ve long celebrated the electrifying impact Hollywood and its packed roster of superhero movies are having on box office takings all over the globe. The appeal of these audiovisual masterpieces was underlined by Imax chief executive Richard Gelfond last week who declared: “With a robust lineup of tentpole films ahead, like the highly-anticipated Avengers: Endgame… we anticipate delivering our strongest box office year ever in 2019.”

Indeed, news that the latest outing for Captain America et al generated $1bn in ticket sales in its opening weekend, the first time such a milestone has ever been achieved, illustrates the immense profits-generating capabilities of such films.

It’s no shock to find City analysts forecasting a 19% earnings rise at Cineworld in 2019 then, a figure that creates a dirt-cheap prospective P/E multiple of 12.5 times. Throw big dividend yields of 4.2% and 4.6% into the bargain and I reckon the FTSE 250 firm is a cracking buy today.

Yields close to 6%

The broader advertising market may be under pressure but this isn’t likely to dent STV Group (LSE: STVG) and its ability to deliver splendid earnings growth, or so say the experts. An 11% bottom-line rise is forecast for 2019.

The broadcaster’s latest trading statement last week certainly gave fresh reason to be optimistic. In it, STV said that total advertising revenues are expected to have risen 1-2% in the first quarter, with a marginal drop in national sales anticipated to have been offset by ripping regional ad sales growth of 20-25% and digital ad growth of 15-20%.

What’s more, a decade’s best viewing performance in 2018 has carried over to the first quarter, the firm said, helped by soaring watching figures on the STV Player platform. It’s why City brokers are predicting a 13% profits rise in 2019, a projection that creates a forward P/E rating of just 8 times. Dividends will also keep climbing through to the end of next year too, resulting in monster yields of 5.6% for 2019 and 5.9% for 2020. I reckon STV is a stock that could help you to make a fortune in the years ahead.

I think that was an astute judgment, as the share price has been flat in 2018 so far. And I see that as relatively positive, as I wouldn’t have been at all surprised to see a price fall in 2018 as often happens after a big growth stock surges, and when early buyers then go looking for the next big thing.

Since then, forecasts for this year have been uprated, with that early 3% EPS fall replaced by a predicted 5% rise (with a further 5% suggested for 2019).

First-half results released Tuesday provided support for that optimism, with half-time adjusted EPS up 8.1% after revenue climbed by 10.3%. The company lifted its interim dividend by 11% to 1p per share (though the dividend is weighted towards the second half).

Acquisition

Chief executive Chris Sander described it as “another consistently strong performance,” pointing to the company’s strategy of organic growth coupled with “selective acquisitions.” To that end, the firm also announced the acquisition of South West Laundry Ltd, which seems to fit nicely with Johnson’s textile rental business.

Debt is a bit of an issue, but net debt remained reasonably stable at £91.2m, and a net debt-to-adjusted EBITDA ratio of 1.6x is perhaps only a little high at worst. I’m not too troubled by it.

With the full year now expected to come in “slightly ahead of current market expectations,” I see forward P/E multiples of around 14 to 15 as tempting. Progressive dividends add to the attraction, even if they are only yielding around 2% now.

Bigger yield

STV Group (LSE: STV) also revealed first-half figures Tuesday, and after a couple of flat years, it looks like we could be on for renewed EPS growth here too as the firm made the bold claim that its “strategic growth plan gathers momentum.”

The company saw total revenue grow by 6%, with advertising revenue up by the same margin and digital revenue up 24%. STV also enjoyed its best share of viewing figures since 2009, at 18.7%, and was happy to point out that it beat ITV by 10%. Cost savings of £2m to fund new investments are on track too.

The bottom line showed an 8% rise in pre-tax profit, with adjusted EPS up 6%, and that enabled a 20% jump in the interim dividend. But what are the downsides?

Debt?

Well, debt is a bit of an issue here, up 11% to £37.8m. That’s around 1.65 times annualised EBITDA (based on the first-half figure of £11.4m), but again, I don’t see it as too stretching.

With P/E ratios in the 8 to 9 range, we’re looking at a PEG ratio based on 2019 forecasts of 0.6 — which looks attractive from a growth standpoint.

But so far I have neglected what fellow Fool writer Rupert Hargreaves likes best about STV, its dividends. Analysts are forecasting yields of 5% and 5.4% for this year and next, which should be more than twice covered by predicted earnings. And with EPS rises of 7% and 13% suggested, STV looks like a promising candidate for both growth and income to me.