Share prices have generally moved higher in the last few months. The Trump rally has really taken hold. Therefore, I thought it would be a good idea to find 5 shares which seem to be cheap. Although I think stock markets could yet move higher, finding good value shares may be a sound move for investors like myself. It could help to maximise share price gains and limit losses to some extent.
House builder Persimmon plc (LON:PSN) (LSE:PSN.L) has a P/E of 11.6. In my opinion, this is relatively cheap because I think the sector will perform relatively well in the long run. I feel the demand for housing will stay ahead of supply in future years, which means Persimmon may be able to benefit.
Persimmon’s future is uncertain because of Brexit, which is also affecting J Sainsbury plc’s (LON:SBRY) (LSE:SBRY.L) outlook in my opinion. I feel consumer spending could fall this year, as wage rises are eclipsed by faster-rising inflation. Sainsbury’s decision to buy Argos could be a good move in the long run, but I think it may lead to difficulties in the short term. A P/E of 11 makes Sainsbury’s a relatively appealing investment, though, on a relative basis.
easyJet plc (LON:EZJ) (LSE:EZJ) may also be affected by Brexit in my view. Uncertainty in Europe may cause demand for short-haul flights within the EU to fall. However, I also think a rising oil price may cap supply in what is a more competitive environment. Therefore, I think easyJet’s P/E of 8.8 has investment appeal.
Royal Mail PLC (LON:RMG) (LSE:RMG.L) is a stock I’m optimistic about. I think the decline in its letters segment could be offset to at least some extent by decent performance in Europe. Royal Mail may also see forex gains over the medium term. Growth in EPS may be lacking in the next couple of years, but its P/E of about 10 takes this into account in my view.
Lloyds Banking Group PLC (LON:LLOY) (LSE:LLOY.L) is one of the cheapest large-cap stocks I can find at the moment. Its P/E of around 9 means it has investment appeal in my view. I think it may struggle if the UK economy deteriorates this year. But I feel Lloyds has become a strong bank relative to its peers and is efficient in comparison. Therefore, I’m optimistic about its long-term prospects.