2 penny stocks to buy before the Stocks and Shares ISA deadline!

It’s only a matter of weeks before the Stocks and Shares ISA deadline comes around. So I’m looking for some exciting growth shares to load up on before I lose my remaining allowance for the 2021/2022 tax year. Here are two top penny stocks I’m considering investing in.

An attractive dip buy

I think buying BATM Advanced Communications (LSE: BVC) could be a shrewd move following recent extreme share price weakness. The business — which manufactures coronavirus-testing equipment — has slumped as fears over the pandemic have receded. However, as soaring cases in China show, the battle against the pandemic is far from over. Indeed, Infection numbers in the country have just hit two-year highs.

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Markets around the world are reeling from the current situation in Ukraine… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. We believe these stocks could be a great fit for any well-diversified portfolio with the goal of building wealth in your 50’s.

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In a recent article in The Lancet, scientist Christopher Murray claimed that “Covid-19 will continue but the end of the pandemic is near”. This suggests that demand for BATM’s products could continue ticking along even if a fresh full-blown upturn in the pandemic is avoided.

But I wouldn’t just buy this penny stock for its Covid-19 testing kits. The business also generates a sizeable chunk of revenues from manufacturing networking and cyber security products. These are two areas that could grow significantly as the digital revolution clicks through the gears. Revenues from BATM’s cyber security division, for example, leapt 111% year-on-year in 2021.

A high-profile failure of BATM’s systems could prove catastrophic for future revenues. But it’s still my belief that the advantages of owning this particular cheap UK share outweigh the risks.

Another great penny stock

Copper values are flying as the market frets over shortages of the essential commodity. Disappointing red metal production in Chile has shaken nerves in recent days, and concerns over supply due to the Russia-Ukraine dispute have added fuel to the fire. Red metal stockpiles in London Metal Exchange (LME) warehouses have fallen to their lowest level since the early 2000s.

Three-month copper prices have just hit fresh all-time highs of around $10,800 per tonne on the LME as a result. Many analysts suggest the market could experience a serious deficit of material in 2022 and beyond too, meaning that metal values could remain white hot. This bodes well for Phoenix Copper (LSE: PHC), a miner which looks on course to begin producing the metal late this year.

I’ve long talked about copper stocks as a great investment as the green revolution takes off. The highly-conductive commodity they dig for is an essential material in the manufacture of electric cars and charging infrastructure. It is also used in massive amounts to build renewable energy technology like wind turbines. Thus there’s a good chance copper prices — and by extension profits at companies like Phoenix Copper — will be strong over the next decade at least.

Phoenix Copper isn’t a guaranteed winner, of course. In particular, any difficulties in getting its Empire metal mine in Idaho up and running in 2022 would have significant consequences for profits forecasts. That said, I still think this penny stock remains a highly-attractive investment as investment in low-carbon technologies rockets.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

This FTSE 100 stock is down 45% in 1 year: here’s why it can soar again!

The FTSE 100 company I’m highlighting today is Ocado (LSE: OCDO). It has a £9bn market cap and its operating segments include retail, UK solutions & logistics, and international solutions. Most people are familiar with Ocado from its retail segment, which provides online grocery and general merchandise offerings to customers in the UK.

Ocado to outperform the FTSE 100 in 2022?

In a research note on 23 February, Royal Bank of Canada put a target price of 1,700p on Ocado, which is 43% higher than its current share price. If Ocado hits this within the next few years then it will almost certainly outperform the FTSE 100.

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Markets around the world are reeling from the current situation in Ukraine… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. We believe these stocks could be a great fit for any well-diversified portfolio with the goal of building wealth in your 50’s.

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Bear in mind that one of the biggest drags on the FTSE 100 index last year was Ocado, as its shares fell 11.6% after it posted steep losses. In total, Ocado shares declined 27% last year; however, in 2020 it went up 78.8% while the FTSE 100 returned a loss of –14% for the year.

Highly innovative FTSE 100 technology companies often require substantial profit reinvestment to continue growing through research and development. This is no different with Ocado, as it continues to develop its cutting-edge robotics and artificial intelligence technology. Recent development in its robotics is largely down to joining forces with Kindred Systems and Haddington Dynamics.

Ocado’s robotics are used for a wide range of activities including:

  • Developing smart robotic systems to make them more efficient at picking and packing customer orders.
  • Designing bots that fulfill orders in Ocado’s customer fulfillment centres.
  • Enhancing picking stations and developing a grid that’s tolerant to seismic events.

Ocado designs, builds and operates smart mobile machines, which operate by collaborating to achieve unprecedented efficiency at picking and packing items. Artificial intelligence and machine-learning algorithms are also powerful tools being utilised by the company. The algorithms learn about what you like, which helps Ocado tailor offers relevant to you, helping you find what you need through a personalised experience. The artificial intelligence tools help power forecasts to predict demand, reduce waste and maximise the availability of fresh food. It’s clear to see that Ocado uses cutting-edge technology compared to most of the other food delivery service companies in the FTSE 100.

Declining earnings

Ocado reported a 12.1% fall in earnings before interest, tax, depreciation and amortisation (EBITDA) to £61m for 2021. A net loss of £223.2m for 2021, and a loss of £134.3m for 2020 does not look attractive to me, especially as supermarket spending during the lockdowns increased.

For 2022, Ocado’s finance chief Stephen Daintith told reporters that the company was planning £30m more investment in its International Solutions technology business than the market had anticipated. The upcoming earnings in 2022 may surprise many, therefore I’m not tempted to buy at the current price. Instead, I’d rather wait for Ocado to report stronger earnings, which could potentially see its share price soar again. Ocado is very volatile compared to most of the other FTSE 100 stocks, therefore I consider this a higher-risk stock for potentially a higher reward.

Sabir Husain has no position in any shares mentioned. The Motley Fool UK has recommended Ocado Group. 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.

3 simple steps aimed at boosting my returns from this stock market correction

There’s a good chance the recent stock market correction will provide some decent buying opportunities for long-term focused investors. And I think that because most setbacks, bear markets, corrections and crashes do.

We only have to listen to the stories of gains many investors have made in the months and years following such events. But, of course, those gains aren’t on offer unless we act by buying shares when they undervalue businesses.

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Markets around the world are reeling from the current situation in Ukraine… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. We believe these stocks could be a great fit for any well-diversified portfolio with the goal of building wealth in your 50’s.

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Buying when the news is gloomy

Often, the time to buy feels more like the time to sell! And that’s because the keenest valuations arise when the news is at its gloomiest. But that doesn’t stop seasoned and successful investors such as billionaire Warren Buffett from loading up with stocks when there’s a crisis.

And in recent years we’ve had many opportunities to copy his approach. For example, this century we had the tech-wreck bear market when the dotcom bubble burst in 2001. Then we had the financial crisis and subprime mortgage fiasco around 2008. And the coronavirus crash in 2020, followed by the war in Ukraine now in 2022.

One thing is certain, in the coming years there will likely be more bear runs for stocks. And that’s because history is littered with them. And for me, the key to buying decent stocks during such periods is to focus on the quality of the underlying business.

Sometimes good stocks can be pulled down in a falling market even if they don’t deserve it. And others will suffer perhaps temporary setbacks to their businesses. And the stock price may go too low and understate the value of a company.

A 3-step plan

So the first step I’d take to boost my long-term returns from the current stock market correction is to search for undervalued stocks. And that means a focus on the quality of underlying operations. I could be looking at a bargain if the current stock price delivers a valuation lower than what might be expected for a company’s prospects.

The second step is to establish the presence of an economic advantage within a company’s business. Buffett often refers to that as an economic moat. And just like a moat around a castle deterring invaders, the economic moat makes it difficult for would-be competitors to take market share from a business.

Sometimes moats come in the form of strong brands. Or it could be a geographical advantage, network strength, high switching costs for customers, efficient scale of operations, high entry costs for competitors, and other reasons. Such economic advantages could help a business navigate through short-term difficulties and thrive when the recovery arrives.

The third step I’d take is to adopt a long-term focus after buying stocks during a crisis. Even the war in Ukraine will end at some point. And businesses will likely adapt to whatever the new realities of the world are afterwards. And in the past, the stocks of strong businesses and the markets have recovered and progressed.

However, history is no reliable guide to the future. And even following these three steps doesn’t guarantee a  positive investment outcome. Nevertheless, I’m hunting for the stocks of quality businesses right now to hold for the long term.

For example, I’m looking at this opportunity:

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Kevin Godbold has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

2 FTSE 100 stocks I’d buy instead of Lloyds shares

Times are tough for the UK economy as inflation soars and the cost of living crisis worsens. Following the tragic events in Ukraine, things look set to get a whole lot more difficult too. As a consequence, I’ll continue to steer well clear of Lloyds Banking Group (LSE: LLOY) shares.

Cyclical stocks like British banks have sunk in recent weeks as investors reflected on the rising danger. The Lloyds share price actually slipped to its cheapest for a year, to around 40p, amid the market volatility. Yet I’m not tempted to go dip buying as warnings over the British economy grow.

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Markets around the world are reeling from the current situation in Ukraine… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. We believe these stocks could be a great fit for any well-diversified portfolio with the goal of building wealth in your 50’s.

Click here to claim your free copy now!

Today saw the Centre for Economics and Business Research (CEBR) release some hair-raising predictions for the UK. In response to surging inflation and falling exports to Russia, the economics consultancy now thinks domestic GDP will rise 1.9% in 2022. This is less than half the 4.2% rise the CEBR had been forecasting.

Things get even scarier for next year as well. This is because the CEBR now predicts ZERO growth. The body had been estimating a 2% rise in UK GDP.

Why I worry for Lloyds shares

Look, I’m prepared to buy some stocks if the long-term earnings outlook remains robust. But in my opinion, the threats to Lloyds and its share price remain considerable beyond the next couple of years.

Interest rates are likely to stay well below historical levels, affecting the profits that the banks can make from their lending activities. The impact of Brexit on the economy presents another threat to Lloyds’ long-term earnings. So could the recent sanctions placed on Russia if the geopolitical environment remains tense. Finally, the steady rise of digital-led challenger banks poses another problem for Lloyds to overcome.

So I don’t care that Lloyds shares now trade on a forward price-to-earnings (P/E) ratio of just 6.9 times. I’m also not attracted to the bank’s 5.7% dividend yield for 2022. Despite the bank’s strong brand name, its huge exposure to the strong UK housing market, and the chance that interest rates could rocket in response to rapidly rising inflation, I think that the risks of owning this stock outweigh the possible rewards.

2 FTSE 100 stocks I’d buy

I don’t think that I need to take a chance with Lloyds shares, either. There are plenty of dirt-cheap stocks on the FTSE 100 alone for me to buy today, after all. One of these is Vodafone Group. Sure, the business faces massive competition in its European marketplaces, but I think the growth of 5G and soaring demand for its services in Africa still makes it a top buy. The business trades on a forward price to earnings growth (PEG) ratio of 0.8 today and carries an 6.4% dividend yield.

SSE is another brilliant bargain I’d buy today instead of Lloyds. Like Vodafone, this green energy provider also trades on sub-1 forward PEG ratio of 0.4. And it carries a 5.5% dividend yield today. Operating renewable energy technology like wind turbines is massively expensive and not always reliable. But I believe this FTSE 100 firm could still deliver explosive profits growth as demand for low-carbon power intensifies.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Lloyds Banking Group and Vodafone. 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.

3 lifetime ISA mistakes that you can not afford to make

3 lifetime ISA mistakes that you can not afford to make
Image source: Getty Images


These days, there are a number of different ways to get your foot onto the property ladder. And since their launch in 2017, lifetime ISAs (LISAs) have become one of the most popular ways to do so. The house price boom of recent years has contributed to wider than ever usage of LISAs, according to a report from Hargreaves Lansdown. But for all LISAs can be helpful, it’s important to know how they work. Here, I look into three lifetime ISA mistakes that could leave you worse off than you started. 

1. Not understanding how the withdrawal penalty works

Using a lifetime ISA is a great way to save tax-free for your first home or to fund retirement. And on top of that, the government will reward your effort with a 25% bonus worth up to £1,000 a year.

It all sounds great, right? The catch is that if you need the money for anything other than funding your retirement or paying for a first home, you’ll have to pay back the government a penalty fee of 25% of the balance of your account. 

You might think this equates to simply paying back the bonus the government has given you. Well, think again. This is actually one of the worst lifetime ISA mistakes that people make. Let’s assume that you have maxed out your £4,000 annual LISA allowance and claimed the £1,000 government bonus. This takes your account balance to £5,000. If you want to withdraw the £5,000, you’ll have to give the government 25% of the total, or £1,250, which will leave you with £3,750, not the £4,000 you originally deposited. 

So, make no mistake, this lifetime ISA blunder could cost you more than you initially thought. 

2. Not reading the small print 

Let’s assume that you’re planning to use your LISA towards buying your first home. You haven’t been able to save for very long, but you’ve managed to max out the annual allowance and put £4,000 into the account in a matter of months. This takes you one step closer to your dream of owning a property. However, if you overlook the small print that comes with all LISAs, you might find you can’t access the government bonus you were counting on.

The small print stipulates that you have to have contributed for 12 months before you can access your money with the bonus for your first home. You can’t just deposit £4,000 at the beginning of the financial year and then withdraw it all (including the bonus) a few months later. So, if you plan to use a LISA to save for your first home, make sure you are not planning to buy in the 12 months after opening your account. 

3. Using your LISA to invest in the stock market  

Did you know that you can use your lifetime ISA to invest in the stock market? That’s right, you can use it in the same way as you would a stocks and shares ISA

A key aspect to consider, however, is whether you can afford for your money to be invested in the market for more than five years. If the answer is no, then a stock and shares LISA might not be suitable for you. This is because investing in the stock market should be considered a long-term endeavour. As that will allow you to ride out any stock market volatility.

For example, the early days of the Covid-19 pandemic were characterised by extreme uncertainty that led to a frantic market selloff. And if you were to withdraw your money at that time (for example, because you found a house that you want to buy), then you could end up getting back less than you initially deposited because the markets were down. 

Avoid the pitfalls of this lifetime ISA mistake by considering whether you can afford to invest your LISA five or more years. 

Get the most out of your LISA

  • Don’t get caught out by the 12-month rule. If you want to access your money and collect the government bonus, you have to contribute to your LISA for at least 12 months.
  • To max out your LISA allowance (£4,000), you will need to put away at least £333 a month.
  • Only get a stocks and shares LISA if you plan to invest for more than five years. This way you can ride out any market volatility. 
  • Don’t put all your savings for a house into a LISA. Keep some in an easy access savings account so that it’s accessible for expenses like conveyancing and legal fees. 

Don’t leave it until the last minute: get your ISA sorted now!

stocks and shares isa icon

If you’re looking to invest in shares, ETFs or funds, then opening a Stocks and Shares ISA could be a great choice. Shelter up to £20,000 this tax year from the Taxman, there’s no UK income tax or capital gains to pay any potential profits.

Our Motley Fool experts have reviewed and ranked some of the top Stocks and Shares ISAs available, to help you pick.

Investments involve various risks, and you may get back less than you put in. Tax benefits depend on individual circumstances and tax rules, which could change.

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I was right about the Centamin share price. Here’s what I’d do now

When I wrote about the Centamin (LSE: CEY) share price a few weeks ago, it was still very much a penny stock. But come March, and it has breached those levels. This is a textbook reaction for a gold mining stock at an uncertain time. As the geopolitical situation between Russia and Ukraine creates nervousness for investors, gold prices are on the up. In the past month alone, gold has risen by almost 15%. 

Why the Centamin share price might not continue to rise

The Centamin share price is directly correlated to that of the precious metal. Both the demand for the company’s product and its value is rising, so clearly investors anticipate a positive impact on its performance as well. I agree that might be the case. But that is only so far as both the increased demand and the price rise can be sustained. 

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Markets around the world are reeling from the current situation in Ukraine… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. We believe these stocks could be a great fit for any well-diversified portfolio with the goal of building wealth in your 50’s.

Click here to claim your free copy now!

As things stand, I am not so sure that this will happen, though. As I write in another article today, much like it is possible that a gold price rally could continue if tensions escalate, the metal’s price could deflate if peace returns quickly, as well. And it is to all of our benefit if it does. Not the least because Russia is a fuel supplier and these are still cold months, when gas is needed more than during warmer weather. My point here is, that if I were to buy Centamin today, it would not be because I believe the gold price rally will continue. 

What I like about the FTSE 250 stock

It would be because of other reasons, like its dividends. The company’s yield is not too bad at around 5% right now. This is more than double that for the FTSE 250 index as a whole, of which it is a constituent. Moreover, it has sustained this yield for a few years now, which gives me some confidence that it could continue to do so in the future as well. 

Also, its market multiples are not too bad. It has a price-to-earnings (P/E) ratio of around 11 times. Of course it is much higher than that for another precious metals miner Polymetal International, which has seen its P/E dwindle to one. But that is because it has Russian interests. At the same time, it does not seem high to me considering not just its dividends but also the fact that it is a hedge against both stressed geopolitics and inflation. 

What I’d do

In fact, it is the very idea that this FTSE 250 stock could be a good inflation hedge that led me to anticipate its price will start rising. And as things stand, prices could indeed continue to rise, creating more uncertainty. Its recent performance has been underwhelming, but that could change too. In my last article I had intended to buy it when it was still a penny stock. I missed that boat! But I now intend to catch it as soon as I can. Centamin is still a stock to buy for me. 

Inflation Is Coming: 3 Shares To Try And Hedge Against Rising Prices

Make no mistake… inflation is coming.

Some people are running scared, but there’s one thing we believe we should avoid doing at all costs when inflation hits… and that’s doing nothing.

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Manika Premsingh owns Polymetal International. The Motley Fool UK has no position in any of the shares mentioned. 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.

Cineworld shares are falling: should I buy now?

Cineworld (LSE: CINE) shares were hit hard during the pandemic. With lockdowns enforced across the globe, the cinema chain was forced to shut its doors for months. As a consequence, the shares fell over 70% in 2020. So far, the picture in 2022 isn’t much better – the shares are down 16% in the last 30 days and over 6% year-to-date.

However, the world is steadily recovering from the pandemic, and consequently, cinema footfall is steadily increasing. This could help Cineworld rebuild its revenues and meet its heavy debt obligations. Therefore, could now be the perfect time for me to stock up on some cheap shares? Let’s take a closer look.

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Markets around the world are reeling from the current situation in Ukraine… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. We believe these stocks could be a great fit for any well-diversified portfolio with the goal of building wealth in your 50’s.

Click here to claim your free copy now!

A good buy?

Although the current share price may not reflect it, I do see a number of positives for Cineworld shares. Firstly, it has just undertaken a massive marketing push to try and draw in consumers. Part of this has entailed cutting its prices to £3 per cinema entry, which seems like a great strategy to harness the increased footfall, and set itself aside from the competition. This growth has been supported by a number of high-grossing movies released in 2022, for example, Spider-Man: No Way Home, which was the first film to gross over $1.5bn at the box office since the Covid-19 pandemic.

In addition to this, the most recent trading update — for the six months up to 31 December — reported that group revenues had reached 88% of 2019 levels. This was a huge increase from the 50% reported in July 2021. More specifically, revenues in the US, Cineworld’s largest market, reached 91% of 2019 levels, highlighting an impressive recovery.

Obviously, the shares look cheap. But when comparing them to competition is where I see the real value. Cineworld currently trades on a mere 2.07 forward price-to-earnings ratio. Cineplex, its big competitor, trades on a forward P/E ratio of 33.4. This highlights the massive value that Cineworld shares offer.

Headwinds for Cineworld shares

While Cineworld shares look cheap, there are still some serious risks ahead of the firm.

The firm is still embroiled with a legal battle with its competitor Cineplex after the Ontario Superior Court ordered it to pay over £700m in damages in December 2021. This was mainly due to Cineworld withdrawing from a proposed takeover deal with Cineplex. After the announcement of this news, the shares fell 39% the next day. If the firm loses this battle, who’s to say the shares won’t fall by this magnitude again?

Losing this battle would also add to the enormous debt pile. In my opinion, this is something the firm’s balance sheet simply cannot afford. A primary reason for this is rising interest rates across the world, which will significantly magnify its debts.

The verdict

Overall, I am not comfortable buying Cineworld shares for my portfolio. While the shares are very cheap, I think this is because investors are realising the tough headwinds that Cineworld has ahead of it. In my opinion, it will take time for the firm to overcome these, and hence I will be steering clear in the meantime.

Inflation Is Coming: 3 Shares To Try And Hedge Against Rising Prices

Make no mistake… inflation is coming.

Some people are running scared, but there’s one thing we believe we should avoid doing at all costs when inflation hits… and that’s doing nothing.

Money that just sits in the bank can often lose value each and every year. But to savvy savers and investors, where to consider putting their money is the million-dollar question.

That’s why we’ve put together a brand-new special report that uncovers 3 of our top UK and US share ideas to try and best hedge against inflation…

…because no matter what the economy is doing, a savvy investor will want their money working for them, inflation or not!

Best of all, we’re giving this report away completely FREE today!

Simply click here, enter your email address, and we’ll send it to you right away.

Dylan Hood has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

Should I bother waiting for the 2023 Lloyds dividend?

The 2022 Lloyds (LSE: LLOY) dividend is not due to be paid until the end of May. So it may seem a bit early to be thinking about the 2023 Lloyds dividend. But some elements of the bank’s investment case seem to be changing. I am trying to figure out if that is good or bad news for the future dividend.

2022 Lloyds dividend disappointment

Back in 2020, the banking regulator ordered Lloyds, along with its peers, to stop paying dividends. It restarted them last year. But the bank has been paying out at a markedly lower level than before. Its recently announced annual dividend of 2p per share is only 62% of its 2018 dividend level (I use 2018 as a baseline because the payout for the 2019 financial year was ultimately affected by the pandemic). Rival bank Barclays is now paying out 92% of its 2018 dividend level, Natwest 81%, and HSBC 49%.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the current situation in Ukraine… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

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So, none of the big four UK banks have restored their dividends to their pre-pandemic levels yet. But Barclays and Natwest are both far ahead of Lloyds in restoring dividends to their old level. What was particularly galling about Lloyds’ disappointing dividend increase is that it also announced a £2bn share buyback programme. That £2bn could have funded an extra 6.5p dividend per share, instead of the share buyback programme.

So Lloyds seems to be in no hurry even to get dividends back to where they were before the pandemic. As a shareholder I see that as inexcusable. Its business has recovered – post-tax profits last year of £5.9bn were close to double the pre-pandemic 2019 level of £3.0bn. The tardy pace of restoring the dividend comes despite a massive increase in earnings that could comfortably have funded it. It seems that dividend restoration to pre-pandemic levels is simply not a priority for the board, which alarms me as a Lloyds shareholder.

Business strategy

Lloyds released its results on the day Russia invaded Ukraine, which also weighed heavily on the share price. Nonetheless, an 11% fall suggests the City was underwhelmed despite the bumper earnings. I do not think the rate of dividend increase was the only concern.

I think investors also took fright at Lloyds unveiling its new “clear strategic vision to be a UK customer-focused digital leader and integrated financial services provider, capitalising on new opportunities, at scale”. Lloyds has been down this road of branching into new businesses before, with mixed results. A misstep “at scale” could mean a big hit to profits.

Muted expectations for the 2023 Lloyds dividend

I have seen the investment case for Lloyds as being its UK focus on retail and business banking, which allows for a generous dividend. The share price fall since the results means the shares now yield 4.7%. That is attractive to me and for now I continue to hold the shares.

But I am concerned. The bank’s lukewarm enthusiasm for substantially higher dividends makes me wonder if the 2023 Lloyds dividend will see meaningful growth. The new business strategy could improve profits, but I see a clear risk that it might end up doing the opposite. I fear the bank may squander excess cash that could fund dividends by moving into areas where it lacks a clear competitive advantage. Any big fall in profits could lead to a dividend cut down the line.

Should you invest £1,000 in Lloyds right now?

Before you consider Lloyds, you’ll want to hear this.

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Christopher Ruane owns shares in Lloyds Banking Group. The Motley Fool UK has recommended Barclays, HSBC Holdings, and Lloyds Banking Group. 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.

2 nearly penny stocks to buy before the Stocks and Shares ISA deadline!

Recent market volatility gives me a chance to search for bargains before the Stocks and Shares ISA deadline. And right now I’m looking for some top companies that trade in and around penny stock territory. I think these top UK growth shares could help me make fantastic returns in the coming years.

A bolt from the blue

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the current situation in Ukraine… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. We believe these stocks could be a great fit for any well-diversified portfolio with the goal of building wealth in your 50’s.

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2022 has so far been a year to forget for Trifast’s (LSE: TRI) share price. The business — a giant in the manufacture of screws, bolts, and other types of fastenings — has plunged to within a whisker of penny stock territory. At 111p per share, it’s down 31% since January trading began.

I think this recent collapse makes Trifast’s share price hard to ignore. City analysts think the firm will follow a 78% earnings rise in this financial year (to March 2022) with a 27% year-on-year increase. This leaves Trifast trading on a forward price-to-earnings growth (PEG) ratio of 0.4 for the upcoming period. Any reading below one suggests that a UK share could be undervalued.

Trifast makes its products for a wide range of applications like consumer electronics, white goods, and automotive. It could therefore see sales slump if the cost of living crisis continues to worsen. However, as a long-term investor I find the business highly attractive. And I believe its share price today makes it something of a steal.

I like the fact that its end markets should grow strongly over the long haul on account of soaring emerging market wealth. I also like Trifast’s commitment to global expansion through acquisitions (in August it acquired US distributor Falcon Fastening Solutions for £6m to boost its North American footprint). And I think demand for the company’s fastenings could surge on the back of the electric car revolution too.

Another nearly penny stock I’d buy

I’d also use Greencore Group’s (LSE: GNC) plunge towards the 99p penny stock limit as an opportunity to buy. A forward price-to-earnings (P/E) ratio of 13.8 times doesn’t look shockingly cheap on paper. But recent market volatility has driven the food producers’ dividend yield through the roof. For 2022, the readout sits at a healthy 4.8%.

Any fresh pickup in the pandemic could threaten the recent recovery at Greencore. The food to go specialist saw revenues tank during Covid-19 lockdowns as people stayed at home. But as things stand, the outlook is pretty rosy for the business (City analysts think earnings here will rise 11% in 2022).

I’d buy Greencore because changing consumer habits mean the ‘food on the move’ marketplace is tipped to resume its strong growth of the last decade. Analysts at Mordor Intelligence think the ready-to-eat segment will expand at a compound annual growth rate of almost 5% between 2022 and 2027. And pleasingly Greencore is investing heavily to help it capitalise on this opportunity (it’s spending £30m to increase capacity at three of its manufacturing sites following recent contract wins). I think its plunge to 116p could make the company too cheap for me to miss.

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Royston Wild has no position in any of the shares 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.

As the gold price rallies, should I dump FTSE 100 stocks?

The gold price has been on the rise over the past month, up by almost 15%. Interestingly, this explains most of the 18% increase seen over the past year. No surprises here. Historically, the yellow metal is considered the best hedge against all other investments, including FTSE 100 stocks, when there is either real or perceived danger that things could really go south. The war may have started between Russia and Ukraine, but its economic repercussions can already be felt around the world as inflation rises further because of runaway fuel prices. 

Why the gold price could come off

This is in no way a signal urging investors to press the panic button, but an assessment of the situation as it exists right now. I mean, it is theoretically possible that peace may be struck between the two countries, sanctions on Russia could be removed, and oil and gas prices could subside. This would logically lead to a more optimistic outlook on the global economy and the stock markets. And less insecurity could deflate gold prices.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the current situation in Ukraine… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. We believe these stocks could be a great fit for any well-diversified portfolio with the goal of building wealth in your 50’s.

Click here to claim your free copy now!

Why it could stay high 

On the other hand, it is also possible that we see a prolonged war that continues to create challenges. Europe, for instance, is heavily dependent on Russian gas. This creates both economic and ethical challenges for much of the continent. As gas prices continue to rise, inflation will rise, further weakening European economies while at the same time making Russia richer. 

This also undermines the efforts of governments around the world to discourage support to the Russian government, including the UK. In fact, they wind up inevitably supporting the country, because alternatives to the country’s gas supplies are not that easy to find, as Germany has been reiterating recently. 

What could happen to FTSE 100 stocks

This in turn could continue to keep the stock markets sluggish. The FTSE 100 has dipped since the start of the war, and has not gone back to the highs of early 2022, when it was a heartbeat away from 7,700. But it could be good for the gold price. Not necessarily gold stocks, to be sure. One of my gold-related investments is in the FTSE 100 Russian miner Polymetal International. I do not even want to get started on how badly it has been doing in the past days!

What I’d do now

So, to answer the question asked in the title, I think there is a case for buying gold. As there always is. I have long been a believer that a small proportion of my investments should be in gold because it can be the safest asset in times like this. And if I can hold it in physical form (not my favourite idea), that is even better. But I am not about to dump stocks, either. I have been a stock market investor for a long time and it has held me in pretty good stead. 

The balance of probability indicates to me that while we are in a period of rising risk, there is also a good chance that we can come out of it relatively unscathed. So, I am buying solid FTSE 100 stocks while they are still low, but also increasing my gold holdings. 

Inflation Is Coming: 3 Shares To Try And Hedge Against Rising Prices

Make no mistake… inflation is coming.

Some people are running scared, but there’s one thing we believe we should avoid doing at all costs when inflation hits… and that’s doing nothing.

Money that just sits in the bank can often lose value each and every year. But to savvy savers and investors, where to consider putting their money is the million-dollar question.

That’s why we’ve put together a brand-new special report that uncovers 3 of our top UK and US share ideas to try and best hedge against inflation…

…because no matter what the economy is doing, a savvy investor will want their money working for them, inflation or not!

Best of all, we’re giving this report away completely FREE today!

Simply click here, enter your email address, and we’ll send it to you right away.

Manika Premsingh owns Polymetal International. The Motley Fool UK has no position in any of the shares mentioned. 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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