A specific share price doesn’t really mean a lot. UK shares priced at £5 might be better value than shares at £2, for example. But when shares are selling for significantly less than £1, it often means we’re looking at a fall. And that can mean a recovery candidate.
Here are three priced at under 100p, which I’m strongly tempted to buy for 2023.
Lithium
Lithium stocks were hot in early 2022, but they’ve faded in the second half. It still means Atlantic Lithium (LSE: ALL) shares are 33% up over 12 months, at 33p. But that’s a lot cheaper than their 52-week peak of 68p.
The market cap is a little over £200m, so it’s a small company, and there’s risk with that.
The attraction is that lithium is in great demand for batteries, including for the electric vehicle (EV) market. Shares in EV manufacturers Tesla and NIO slumped in 2022, so that’s possibly behind the weak sentiment in the lithium market.
But the EV business surely has a very big future ahead of it, doesn’t it?
It’s hard to put a valuation on Atlantic, as it’s not yet profitable, and I’d say that’s the biggest risk. But forecasters have a first profit marked down for 2025, even if only a small one.
Cybersecurity
I also like the look of cybersecurity specialist Corero Network Security (LSE: CNS).
Corero has a market cap of only a little over £50m, so it could be be more vulnerable to short-term ups and downs than most. But if I bought, it would be for the long term.
The company provides protection from web attacks, and we’ve seen a big rise in those in 2022. I think we could see significantly bigger demand in the coming decades.
We are looking at a business only just turning profitable, which I think is the main risk. In the first half of 2022, it recorded adjusted EBITDA of only $0.3m. But there was $5.8m net cash on the books.
And Corero expects to see 15%-25% contract growth for the full year.
Lloyds
Lloyds Banking Group (LSE: LLOY) is a FTSE 100 stock I just can’t overlook. It has a market cap of over £30bn. But its share price fall all the way to 45p over the past few years makes it the lowest in the top index today.
The shares have gone nowhere this year, though. And there’s a risk I could be saying the same at the end of next year too. We do, after all, face rising mortgage costs and a weakening property market. Those are not ideal conditions for the UK’s biggest mortgage lender.
Against that though, we’re looking at price-to-earnings (P/E) multiples of under seven. And dividend yields of above 5% and rising. If forecasts are correct, which is admittedly far from certain, dividends could reach 6% by 2024.
Verdict?
Though I’m tempted by all of these, they do all carry different degrees of risk. I rate Lloyds as my safest pick, and I intend to buy more. I’ll examine the other two more closely first.
The post 3 UK shares under £1 to buy for 2023? appeared first on The Motley Fool UK.
6 shares that we think could be the biggest winners of the stock market crash
The hotshot analysts at The Motley Fool UK’s flagship share-tipping service Share Advisor have just unveiled what they think could be the six best buys for investors right now.
And while timing isn’t everything, the average return of their previous stock picks shows that it could pay to get in early on their best ideas – particularly in this current climate!
What’s more, all six ‘Best Buys Now’ are available to access right now, in just a few clicks.
setButtonColorDefaults(“#5FA85D”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43A24A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#FFFFFF”, ‘color’, ‘#FFFFFF’);
})()
More reading
- 3 reasons why Lloyds shares will do just fine in 2023
- Lloyds shares are down 9% this year! Will they recover in 2023?
- Why did this non-exec director buy £200k of Lloyds shares?
- My top 5 dividend shares for 2023!
- 3 cheap FTSE 100 stocks I’m steering well clear of!
Alan Oscroft has positions in Lloyds Banking Group Plc. The Motley Fool UK has recommended Corero Network Security Plc, Lloyds Banking Group Plc, and Tesla. 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.