How I’m still buying cheap shares now to capitalise on the stock market recovery

first_imgHow I’m still buying cheap shares now to capitalise on the stock market recovery Enter Your Email Address Kevin Godbold | Monday, 15th March, 2021 I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Get the full details on this £5 stock now – while your report is free. FREE REPORT: Why this £5 stock could be set to surge Kevin Godbold has no position in any share 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. Are you on the lookout for UK growth stocks?If so, get this FREE no-strings report now.While it’s available: you’ll discover what we think is a top growth stock for the decade ahead.And the performance of this company really is stunning.In 2019, it returned £150million to shareholders through buybacks and dividends.We believe its financial position is about as solid as anything we’ve seen.Since 2016, annual revenues increased 31%In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259Operating cash flow is up 47%. (Even its operating margins are rising every year!)Quite simply, we believe it’s a fantastic Foolish growth pick.What’s more, it deserves your attention today.So please don’t wait another moment.center_img Our 6 ‘Best Buys Now’ Shares One year ago, the FTSE 100 was near the bottom of its crash after Covid-19 emerged and devastated the markets. The index still had a few points further to fall over the coming few days in March 2020, but was close to its nadir.Hindsight makes investing look easy. And it’s clear now a good tactic last spring would have been to back up the truck and load it with the dirt-cheap shares of high-quality businesses to hold for the stock market recovery. Investors could even have restricted their share picks to big-cap companies in the FTSE 100 and produced an impressive return over the past year. Or they could have joined in the ‘dash for trash’ and bought shares in businesses that would go on to be damaged by the pandemic.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…An impressive stock market recoveryIn both cases, shares have been shooting up over the past few months. And that process has been accelerated by the ever-improving economic news on the ground. In many cases, businesses have adapted and continued to trade through the crisis and the lockdowns. And scientific and medical progress offers the world a clear view of a potential escape from the pandemic. It looks like treatments and vaccines for Covid-19 will end up pushing the disease down so that it becomes less prominent in our lives.So, even if businesses have been unable to trade in the lockdowns, it looks like they’ll be able to restart their operations soon. And their shares have been rising to accommodate the improving outlook. After all, the stock market always looks ahead. And what matters is what those businesses are going to achieve, rather than the trading figures they’re producing now.The rally in stocks has been broad-based. And it’s possible to become discouraged and fear we’ve missed the boat. But I reckon it’s still possible to buy cheap stocks as measured against their current or future profit expectations. One good indicator, for example, is the presence of a chunky dividend yield.The appeal of a high dividend yieldI’d aim to select high-yield dividend stocks with a focus on the quality of the underlying business and its future prospects. A portfolio of such income shares could go on to deliver a growing passive income. And I’d plan to reinvest the dividend stream back into my shareholdings so that my gains start compounding over time.However, a high dividend yield is not a positive indicator in itself. And not all stocks with a big yield are worth buying. Some companies may not be able to repeat their historical dividends, especially in today’s harsh economic environment. But if I focus on the quality of a firm’s cash flow and forward projections for earnings, I should be able to identify those companies with attractive dividend prospects.There’s no guarantee this strategy will help me produce decent long-term returns from shares. And successful stock picking isn’t easy. But I’m prepared to embrace the risks because the long-term performance of the stock market, in general, has been positive. Simply click below to discover how you can take advantage of this. Image source: Getty Images. Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. See all posts by Kevin Godboldlast_img

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