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Highlights
- Value stocks are primarily those companies currently trading below what they are worth.
- Value stocks are generally considered less risky than growth stocks, as they are already established and have a proven track record.
The rising cost-of-living crisis and the growing inflation have been pounding UK investors. Even though the inflation rate has been consistently dropping from 10.5% to 10.1% in January, the important thing to note is that prices are not coming down.
According to the Office for National Statistics, the Consumer Price Index, including the Occupier's housing costs (CPIH), rose by 8.8% in 12 months to January 2023, down from 9.2% in December 2022. Electric, gas, and other fuels were the main contributors to the higher CPIH. On a monthly basis, the CPIH fell by 0.4% in January 2023, but it reflected little change since January 2022.
Even businesses across sectors are not aloof to the challenges due to rising operating costs. As Ofgem's energy price cap does not protect businesses, many have been forced to shut shop or work at reduced times.
Image source: Pixabay
During such a period, investors look for value stocks to help them protect and grow their savings while beating inflation. Value stocks are primarily those companies currently trading below what they are worth. They are often contrasted with growth stocks, which are expected to give better returns in the future than the current period. Value stocks are generally considered less risky than growth stocks, as they are already established and have a proven track.
Based on these criteria, Kalkine Media® explores the following value stocks that UK investors can consider.
Ferrexpo Plc (LON: FXPO)
The FTSE 250 constituent is an iron ore pellet producer. Swiss-based Ferrexpo Plc, for the past four decades, has been selling high-quality iron ore pellets to the global steel industry. FXPO, on 27 February, was enjoying a market cap of £ 869.40 million. Ferrexpo's shares were trading at GBX 147.80, up by 0.17%, at 8:03 AM (GMT1), as of Monday. The Ferrexpo shares have given the market investors returns of -2.31% and -5.53% over the past year and on a YTD basis.
Glencore PLC (LON: GLEN)
One of the leading commodity trading and mining businesses, Glencore plc, enjoys a market cap of £61,807.05 million as of 27 February 2023. Glencore witnessed a rally on Monday, up by 0.65% and trading at GBX 491.50 08:10 AM (GMT). The FTSE 100 constituent had an EPS of 0.38 with a P/E ratio of 4.63. Glencore investors are offered an annual dividend yield of 7.89%.
Airtel Africa plc (LON: AAF)
Telecom firm Airtel Africa plc, on 27 February 2023, was trading at GBX 123.10 and was down by 0.41%. The AAF shares have given its investors yearly returns of -14.85% and YTD returns of 10.5%, respectively. Airtel Africa enjoyed a market cap of £4,645.08 million as of Monday. The EPS of the FTSE 100 constituent stands at 0.17, with a P/E ratio of 8.04.
