Top 5 value stocks to buy in December 2021

Highlights

• Companies trading below their real worth are considered value stocks.
• PE and PEG are some of the ratios used to identify undervalued stocks apart from various other parameters.

In common stock market parlance, value stocks are those companies which trade below their real worth. These stocks are called undervalued due to a number of factors, which also includes poor public perception due to any unethical activity carried out by the company. However, if the financial position of the company is strong, the value-seekers go for these stocks during such times before the stocks realise their actual market value and their price rises.

As mentioned earlier, undervalued stocks can have different factors, they can be identified on different parameters as well; ratios like price-to-earnings (PE) ratio and price-to-earnings growth (PEG) ratio etc. can be considered to filter out undervalued stocks. If the PE (Price to Earnings) ratio is low, the stocks are typically called undervalued compared to past trends. Dividing PE by the projected EPS growth of the stock gives us the PEG ratio, and many of the analysts consider the PEG ratio less than 1 as a good measure for an undervalued stock.

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Keeping the above-mentioned points in consideration, here we will discuss 5 value stocks that an investor can buy this Christmas season.

RELATED READ: What are the Value Stocks?

Barclays Plc (LON: BARC)

London-headquartered multinational bank, Barclays PLC, mainly operates through its two divisions, Barclays UK and Barclays International. The bank has made a lot of progress in the past few years, however, it hasn’t been rewarded by investors for the same. As compared to other banks in the UK, the shares of Barclays are still trading at a discount of around 30% to its tangible asset value, which is quite low. This is due to scepticism among investors regarding its investment banking operations.

The current market cap of the FTSE100-listed company stands at £32,428.64 million. It has given a return of 29.60% in the last one year, and its YTD return stands at 32.70% as of 25 November 2021.

Barclays’ price-to-earnings (PE) ratio is 6.18x, and it has a price-to-earnings-growth (PEG) ratio of 0.15x, as of 25 November 2021.

Anglo American Plc (LON: AAL)

UK-based mining company, Anglo American plc, contributes to around 40% of the global platinum production. It also produces diamond, iron ore, copper, nickel etc.

The current market cap of the FTSE-100 listed company stands at £38,625.06 million. It has given a return of 22.82% to its shareholders in the last one year, and its YTD return stands at 17.08% as of 25 November 2021.

Anglo American Plc’s PE ratio stands at 7.04x, and it has a PEG ratio of 0.48x, as of 25 November 2021.

RELATED READ: M&G PLC (LON: MNG): Should you buy this FTSE 100 value stock?

Redrow Plc (LON: RDW)

Based in Flintshire, Redrow plc holds a position among the leading housebuilders operating across the UK. In March 2020, the stock price of Redrow hit a record low of GBX 313.2 due to the disruptions caused by the pandemic, which led to a global market crash. However, its stock performance has improved in the past year, and this trend is expected to continue as the UK Government keeps up its stance to boost the housing market.

The current market cap of the FTSE-250 listed company stands at £2,313.89 million. It has given a return of 21.28% to its shareholders in the last one year, and its YTD return stands at 16.19% as of 25 November 2021.

Redrow plc’s PE ratio stands at 8.92x, and it has a PEG ratio of 0.48x, as of 25 November 2021.

Serco Group Plc (LON: SRP)

Serco Group plc is a UK-based company that functions as a contractor that provides government services in sectors such as defence, transport, health, and so on. Amid the growth in demand for Covid-related services, the company has performed better than expected this year so far. As compared to last year, it expects a higher revenue of around GBP4.4 billion and an underlying trading profit of around GPB225 million in 2021.

The current market cap of the FTSE-250 listed company stands at £1,654.06 million. It has given a return of 11.82% to its shareholders in the last, one year and its YTD return stands at 13.22% as of 25 November 2021.

Serco Group’s PE ratio stands at 5.71x, and it has a PEG ratio of 0.55x, as of 25 November 2021.

RELATED READ: Top 5 FTSE value stocks for November 2021

Londonmetric Property Plc (LON: LMP)

Leading UK-based property company, Londonmetric Property PLC, is a real estate investment trust (REIT) which primarily invests in property development.

The current market cap of the FTSE-250 listed company stands at £2,673.01 million. It has given a return of 18.11% to its shareholders in the last one year, and its YTD return stands at 20.17% as of 25 November 2021.

Londonmetric Property Plc’s PE ratio stands at 5.84x, and it has a PEG ratio of 0.77x, as of 25 November 2021.