Cheap UK stocks! Should I buy these 5 popular AIM shares now?

Like many investors, I’m always on the lookout for cheap UK stocks. Some believe it Alternative Investment Market (AIM) shares offer the best value.

Listed below are the five most traded stocks on AIM in 2022. Their popularity suggests that investors believe they are a bargain. Are they right?

A quick rundown

The price of this stock is from boohoo, an online retailer, is down nearly 60% in the past 12 months. This may indicate that the stock is undervalued, or that investors are concerned about the company’s future earnings potential. Looking at the financials, it appears to be the latter. Sales are up but profits are down. Trading updates due today will be interesting to see what the latest positions are.

ITM power‘s stock price has also fallen recently. It’s down 72% over the past year and, on Monday, it’s down 12%. The company changed its chief executive in December and, after a detailed review of its operations, believes that its results for the current financial year will “different material” from previous expectations. This is especially disappointing because the company is involved in the production of green hydrogen, which is often described as the fuel of the future.

Jet2 it is the third largest airline in the UK. The stock has fallen 12% since January 2022. The company has suffered greatly due to the pandemic, flying 1.3 million passengers in the year to March 2021, compared to 14.6 million in the previous year. The latest update shows that the recovery is underway – 11.2 million people flew in the six months to September 2022. Of course, this is why the stock is so popular with investors. The directors seem confident about the future, and currently have 98 new aircraft on order.

Fevertree claims to be the number one global premium mixer brand. Its share price has fallen 60% over the past year. Looking at the company’s results, it’s not clear why. Both sales and operating profit increased. However, the price-to-earnings ratio (P/E) is approaching 32, proof that the stock is currently very expensive.

Serica EnergyStock ‘s only one in five has increased over the past 12 months (up 16%). The company is a North Sea oil and gas producer. With 85% of production coming from natural gas, profits and gains have been high due to rising energy prices. The stock is attractive because it yields a 6% dividend, another indicator of value for money.

Any deals here?

Personally, I believe ITM Power has better prospects than boohoo. However, I will not invest until I see a clearer path to better profits.

Wholesale gas prices are starting to drop, so I think it may be too late to profit from Serica Energy stock.

Fevertree is a solid company but the stock doesn’t look cheap to me.

My favorite of the five AIM stocks is Jet2. The stock is down 43% from the high it reached in February 2020, before the world shut down due to Covid-19. That is why I will include stocks in my watch list, with the aim of investing when I have money.