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Every month, we ask freelance writers to share their best ideas about stocks to buy with investors – here’s what they’re talking about for April!
[Just beginning your investing journey? Check out our guide on how to start investing in the UK.]
Barclays
What we do: Barclays is a high-end UK bank, with an international investment banking arm and US interests.
By Alan Oscroft. I see so many British stocks that look good value, I’m spoiled for choice.
But now, I really can’t look past that Barclays (LSE: BARC). The US banking failure has disrupted the UK banking sector. And Barclays, with its US arm, suffered the most.
Even as I write, I see European economists talking about the real possibility of global banking instability this year. And I really think there’s a significant chance of that happening.
Oh, and inflation is worse than expected, which will also put pressure on the world’s financial institutions.
So do I see Barclays as a buy for April? Well, it’s all about the price, and my latest sell-off has just pushed the Barclays stock price down very low.
Estimates put the stock on price-to-earnings (P/E) of five. And unless Barclays goes bust, I’m the one who looks like a steal.
Alan Oscroft owns no Barclays shares.
Barclays
What we do: Barclays serves 48 million customers worldwide and has operations across a range of sectors including retail and investment banking.
By John Choong: The recent sell-off in bank stocks has sparked fears. Consequently, the Barclays (LSE:BARC) share price has fallen 20% since the start of the turmoil, as I write. However, there are many reasons for me to believe that the stock is trading at an incredible value.
For one, finance remains one of the strongest FTSE 100 friends. This is partly due to stricter regulations imposed by regulatory bodies in the UK. Thus, the CET1 ratio, liquidity and countercyclical coverage (CCLC) are very strong.
| Metric | Barclays |
| CET1 ratio | 13.9% |
| Liquidity coverage ratio | 165% |
| CCLB ratio | 0.2% |
In addition, it also has one of the strongest deposit bases in the sector. This is because the percentage of risk-weighted assets held to total assets is lower than its counterparts. In addition, many of these deposits are from retail customers, which means that the chances of these funds being insured are higher – reducing the likelihood of bank runs.
Pair the above with the industry’s low valuation multiples, and it’s easy to see why Barclays shares are playing for April.
| Metric | Barclays | Industry Average |
| P/B value | 0.3 | 0.7 |
| P/E ratio | 4.2 | 9.0 |
| FP/E ratio | 4.4 | 5.5 |
John Choong has no position in any of the stocks mentioned.
Greencoat UK Wind
What we do: Greencoat UK Wind operates 45 onshore and offshore wind farms with a total power capacity of 1.6GW.
By Royston Wild. April could be a big month for safe-haven UK stocks if worries about the banking sector explode. Renewable energy storage Greencoat UK Wind (LSE:UKW) is one stock that could see its share price rise.
As the name suggests, this company invests in wind farms in the UK. So, if there are no production problems, it can be expected to continue to increase income regardless of the economic landscape. Electricity is a valuable commodity, after all.
Greencoat UK Wind has attractive investment potential beyond the immediate term, too. As governments cut carbon, demand for clean energy will rise.
Today FTSE 250 the company trades at a forward price-to-earnings (P/E) ratio of just 6.5 times. It also yields a tasty 5.5% dividend. All these values make it a good buy for investors looking for cheap stocks in my opinion.
Royston Wild has no shares in Greencoat UK Wind.
GSK
What we do: GSK is a global healthcare company working in pharmaceuticals and vaccines.
By Edward Sheldon, CFA. GSK (LSE: GSK) Shares have fallen over the last year and I think they offer decent value at the moment. Currently, the stock trades on an expected price-to-earnings (P/E) ratio of less than 10 – well below the UK market average.
GSK’s final results for 2022 show that the company is doing very well today. For the year, sales were up 13% in constant currency to £29.3bn. Meanwhile, adjusted earnings per share rose 15% to 139.7p.
Looking ahead, the healthcare company said it expects revenue growth of 6-8% this year along with earnings growth of 12-15%. It expects to pay a dividend of 56.5p per share, which equates to a current yield of around 4%.
One of the main risks here is that Zantac litigation. This adds some uncertainty. Another is debt on the balance sheet. I think this risk has probably been priced into the stock already though.
Edward Sheldon has no position at GSK.
Legal & General
What we do: Legal & General is one of the UK’s largest financial services and insurance companies.
By Charlie Keough. The highest value of British stocks for April was Legal & General (LSE: LGEN).
As I write, the FTSE 100 giant is trading at a price-to-earnings ratio of just six. With this, I consider that the stock offers great value.
What also attracted me to Legal & General is the plan to increase the dividend through initiatives that have been implemented in recent years. By 2024, the business is targeting a cumulative dividend ambition of £5.6bn-£5.9bn. And since announcing this in 2020, Legal & General has made great strides.
On top of this, the stock offers a meaty dividend yield of around 12%, significantly outperforming the Footsie average of around 3-4%.
The share price has suffered in the past year. And this may be because consumers shy away from making investments because they keep some much-needed cash on hand.
However, with its low valuation and high dividend, I like Legal & General stocks.
Charlie Keough owns shares of Legal & General.
persimmon
What we do: Persimmon is a housebuilder who buys land and develops homes across the UK
By Christopher Ruane. I have been eyeing a homebuilder persimmon (LSE: PSN) has been around for a long time before I recently bought shares for my portfolio.
why now? After all, the property market could get worse in the coming months and years. That can lead to profit and profit in Persimmon. But I think the risk has been reflected in the share price.
The current price-to-earnings ratio of 7 looks like a good value to me, although of course if earnings fall too much the ratio will be less attractive. Persimmon has set plans to cut its dividend this year. The revised payout policy may mean that future years will see smaller dividends than in the past.
I see that prudent management given the uncertain housing market. Even after the Cut, I expect Persimmon to offer an attractive dividend. Persimmon has a business model that can generate strong profit margins in good years. As a long-term investor, I am prepared to wait.
Christopher Ruane owns shares in Persimmon.
persimmon
What we do: FTSE 100 member Persimmon is one of the UK’s biggest housebuilders
By Paul Summers: My decision to take a position at homebuilder persimmon (LSE: PSN) a few months ago could not start. The ongoing jitters surrounding the cost of living and rising interest rates coupled with the recent banking crisis will not improve sentiment.
Still, I’m not about to throw in the towel (or should I trowel?) In. This still looks like a great stock to me. As I type, Persimmon shares trade at a little less than 11 times forecast earnings. But this is after analysts have factored in a heavy hit to the numbers this year.
We also now have clarity on dividends. While the cut is not in sight, the likely return of 6.4% for FY23 remains more satisfactory in my opinion.
If/when interest rates reverse, the reaction in Persimmon’s stock price could explode.
Paul Summers owns shares in Persimmon
Health Target
What we do: Target Healthcare is a UK-based real estate investment trust (REIT) that invests in purpose-built modern care homes.
By Mark Tovey. Target Health (LSE:THRL), like most REITs, has seen its share price collapse in recent months as rising interest rates continue to weigh on the value of its property portfolio. It currently trades at a price-to-book ratio of 0.64, with a forward dividend yield of 9%.
I like Target’s business model because it is positioned to take advantage of unstoppable demographic trends. The number of over 85s in the UK is expected to almost double to 3.3m over the next 25 years. Ready to accommodate the rising tide of grays is Target, with 101 care homes across the UK.
Importantly, Target has a diverse tenant base, with 34 different companies leasing the property. The target average lease period is nearly thirty years, and annual rent growth is baked into the contract.
The biggest risk in buying shares, which I plan to do, is that no one knows how property prices can fall.
Mark Tovey has no shares in Target Healthcare.
Unilever
What we do: Unilever is a British consumer goods conglomerate whose products include dove, Magnum and Hellmann’s.
By John Fieldsend. Unilever (LSE: ULVR) has an excellent track record of strong dividend payouts combined with share price growth. A profitable history for shareholders indicates good management and culture, and is the first thing I look for in a stock I want to hold for many years.
Not only that, but the company is well-positioned to weather the storm of a recession or a cost-of-living crisis because of the power of its brand.
When people shop, they tend to go for the cheapest option, especially in a recession. But when someone wants a branded item like a Magnum ice cream, no other choice. This is one reason why increased costs can be passed on to consumers through sales differences. And that’s the key to why Unilever and its focus on strong brand power is a good value stock for the long term.
John Fieldsend has no shares in Unilever.
XP Power
What we do: XP Power is a world-leading provider of critical power solutions for the industrial, medical, and semi-conductor manufacturing sectors.
By Zaven Boyrazian. 2022 is a tough year for the beloved electronics specialist XP Power (LSE: XPP). The company designs and manufactures electronic components used in medical, industrial, and semi-conductor manufacturing machines. But its share price took a hit after a legal tussle with a rival company.
XP Power was ordered to pay $40m in damages. And when combined with its own legal costs, the operating profit fell from a gain of £ 29.7m to a loss of £ 24.1m in 2022. What’s more, with spending more inventory to satisfy the backlog of orders paired with new acquisitions, net. the debt balance ballooned from £24.6m to £151m over the same period.
While frustrating, none of these factors compromise the company’s long-term strategy. Revenue still doubles. And management expects to return to full profitability next year, with net debt balances falling rapidly as the order backlog is cleared.
Trading at a forward P/E ratio of just 13, XP Power looks like a value opportunity to me.
Zaven Boyrazian owns shares in XP Power.
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