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Highlights
- Investors have an opportunity to buy cheap stocks as the market has started going downwards due to the fear of the new variant of the coronavirus, Omicron.
- The WHO has issued a warning that the Omicron variant could potentially change the pandemic’s trajectory.
- The new Covid-19 variant has created a lot of uncertainty and volatility in the stock market of late.
Investors prefer buying the dips to capitalise on the falling prices of shares and generate maximum wealth. Such buying opportunities have been increasing since last Friday as the market has started going downwards due to the fear of the new Omicron variant of the coronavirus. The new covid strain, which was initially detected in South-Africa, has created panic worldwide due to higher risk of re-infections. The WHO has also issued a warning that the Omicron variant could potentially change the pandemic’s trajectory due to its unparalleled number of spike mutations leading to higher risk of transmission.
A new wave of infections could yet again increase restrictions and create troubles for the reviving businesses and the overall economy ahead of the festive season. Some investors are speculating that the situation could get as worse as 2020, and thus have started disposing off their shares to minimise their losses, while other investors are capitalising on the cheap buying opportunity. However, these mixed responses to the new Covid-19 variant have created a lot of uncertainty and volatility in the stock market.
Simply buying the cheap stocks isn’t a viable strategy for investors. For instance, the value of travel stocks has been going down, but their balance sheets are also deteriorating with excessive debts. Also, the travel sector is expected to be hit the hardest if the fears related to the spread of the new variant worldwide are materialised. Thus, falling prices should be considered a good buy call while taking other factors into account, like recent performance and future growth prospects.
RELATED READ: Should you hold your aviation and tourism stocks?
Here are 3 cheap UK stocks that may perform well despite the fear of restrictions due to the Omicron variant.
Source: Copyright © 2021 Kalkine Media
Learning Technologies Group PLC (LON: LTG)
Learning Technologies Group plc is a constituent of the FTSE AIM UK 50 Index, and its current market cap stands at £1,359.29 million. It has given a return of 13.91% to its shareholders in the last one year. Learning Technologies Group plc’s shares were trading at GBX 172.80 as of 1 December 2021 (GMT).
ITV plc (LON: ITV)
ITV plc’s current market cap stands at £4,552.74 million. The media company has got the majority of the regional television licences, and one of oldest networks in the UK. It has given a return of 11.59% to its shareholders in the last one year. ITV plc’s shares were trading at GBX 113.10 as of 1 December 2021 (GMT).
RELATED READ: FTSE 100 plunges on reports of new Covid-19 variant
Ocado Group PLC (LON: OCDO)
Ocado Group PLC provides solutions for online grocery shopping across the globe. The company is a constituent of the FTSE 100 index, and its current market cap stands at £13,070.29 million. It has given a negative return of 21.04% to its shareholders in the last one year. Ocado Group plc’s shares were trading at GBX 1,739.50 as of 1 December 2021 (GMT).
