June 27, 2022

I’d buy these 2 cheap UK shares for an ISA today

Here are two of my favourite cheap UK shares on the market right now.

I reckon these undervalued equities could produce large total returns for investors in the years ahead as they benefit from the UK’s economic recovery. This could make them the perfect Stocks and Shares ISA investments. 

Cheap UK shares to buy

Shares in sandwich maker Greencore (LSE: GNC) have fallen heavily this year. It’s easy to understand why investor sentiment towards the company has soured in 2020. The majority of the group’s sales are to travellers and workers who don’t have the time to prepare their meals.

Unfortunately, these two markets have been significantly impacted by the coronavirus pandemic. Both domestic and international travel effectively stopped at the height of the lockdown. Meanwhile, many workers have been reluctant to return to their crowded offices. 

However, I think these are only temporary headwinds. Over the past few months, the number of people travelling around the country has dramatically increased. This trend looks set to continue as the world learns to live with coronavirus. At the same time, it may only be a matter of time before companies start to ask more employees to return to their offices. 

As such, I think it may be worth buying Greencore as part of a basket of cheap UK shares. Yes, the company is facing significant headwinds at present but, as one of the largest manufacturers of ready-to-eat food in the UK, it has substantial economies of scale. These should help the business stage a recovery when activity begins to pick up. 

Essential business

Marks & Spencer (LSE: MKS) was one of the UK’s most respected retailers. Unfortunately, over the past few years, the company has lost this crown. 

But that doesn’t mean investors should stay away from the stock. Indeed, after recent declines, the shares are starting to look extremely attractive. Due to changing shopping habits, the company has seen its sales and profits decline over the past few years. Management is now working to reverse this trend. 

For example, Marks was late to the online food retail market. Its new tie-up with Ocado is designed to remedy this, and initial indications are good. Demand for the company’s products on Ocado’s platform surged in the first week. 

The group is also trying to cut costs to improve competitiveness. This move makes a lot of sense as more sales move online. 

Despite these efforts, it’s clear the firm will continue to face headwinds for some time. However, after recent declines, it looks as if these risks are already factored into the current share price.

Therefore, I reckon it’s worth buying Marks as part of a basket of cheap UK shares. At present, it looks as if the market has written off the business, so any sudden improvement in trading could yield big profits for investors. 

The post I’d buy these 2 cheap UK shares for an ISA today appeared first on The Motley Fool UK.

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Rupert Hargreaves owns no share mentioned. The Motley Fool UK has recommended Greencore. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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