Recent financial market volatility presents a great buying opportunity for lovers of value stocks. The panic of the past week has left many quality UK shares trading much lower alongside more vulnerable businesses.
Here are a couple of top value stocks I’m considering buying for my own portfolio today.
Insolvency specialist Begbies Traynor (LSE:BEG) is the sort of company that should benefit from a banking industry storm. As economic conditions worsen, the number of firms seeking its assistance could balloon.
Yet this AIM share has also plummeted in value of late. As a consequence it now trades on a forward price-to-earnings (P/E) ratio of 12.6 times.
In fact things look good for Begbies even if the banks avoid a meltdown. This is because the volume of businesses unfortunately experiencing significant financial distress is already rising strongly.
Latest data from the Insolvency Service showed the number of corporate insolvencies leap by almost a fifth (17%) year on year in February.
I also like Begbies Traynor because of its ambitious acquisition-led growth strategy. Earnings have grown steadily in recent years thanks to steady investment. And pleasingly the company has plenty of balance sheet strength to continue building scale.
The firm’s net debt to EBITDA ratio sat at a rock-bottom 0.2 as of December. This gave it the firepower to make a £400,000 acquisition (of chartered surveyors Mark Jenkinson & Son) last month, a move boosting its footprint in the city of Sheffield.
Begbies Traynor’s earnings could grow slowly during any economic upturn. Yet I believe the fruits of its acquisition strategy might still make it a top buy for long-term investors.
Telecoms and financial service business Airtel Africa (LSE:AAF) is another value stock on my radar today. The FTSE 100 company trades on a forward P/E ratio of just 8.4 times right now.
The company also offers great value when it comes to passive income. Today its dividend yield sits at an index-beating 4.6%.
As its name implies, Airtel is focussed on fast-growing African economies. The trouble is that the competition it faces is increasing rapidly as companies pile in to capitalise.
Fellow FTSE share Vodafone is one big beast threatening the company’s revenues prospects. This industry heavyweight operates the M-Pesamobile money division as well as traditional telecoms services, providing a double threat to Airtel.
Yet the rate at which the market is tipped to grow still makes Vodafone’s smaller rival an attractive stock in my opinion. Network operator World Mobile says that telecoms will be Africa’s fastest-growing sector over the next five years.
As a possible investor I’m encouraged by the pace at which Airtel is growing its subscriber base, too. It had 138.5m customers on its books at the end of December, up 10.1% year on year.
The company is also expanding its mobile money and data business across Sub-Saharan Africa to give subscriber numbers an extra boost. I think profits here could rise strongly in the coming decades.
The post 2 top value stocks I’d buy after recent market volatility! appeared first on The Motley Fool UK.
Don’t miss this top growth pick for the ‘cost of living crisis’
While the media raves about Google and Amazon, this lesser-known stock has quietly grown 880% – with a:
- Greater than 20X increase in margins
- Nearly 60% compounded revenue growth over 5 years – more than Apple, Amazon and Google!
- A 3,000% earnings explosion
Of course, past performance is no guarantee of future results. However, we think it’s stronger now than ever before. Amazingly, you may never have heard of this company.
Yet there’s a 1-in-3 chance you’ve used one of its 250 brands. Many are household names with millions of monthly website visitors, and that often help consumers compare items, shop around and save.
Now, as the ‘cost of living crisis’ bites, we believe its influence could soar. And that might bring imminent new gains to investors who’re in position today. So please, don’t leave without your FREE report, ‘One Top Growth Stock from The Motley Fool’.
setButtonColorDefaults(“#5FA85D”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43A24A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#FFFFFF’);
- 3 UK small-cap shares I’d buy to hold for 10 years!
- Best British small-cap stocks to buy for March
- 2 high-potential FTSE 100 stocks investors should snap up in March!
- 2 FTSE 100 stocks with strong yields to buy before March!
Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Airtel Africa Plc, Begbies Traynor Group Plc, and Vodafone Group Public. 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.