Cheap UK shares: why I reckon Bellway is a top recovery and growth play right now

first_img Click here to claim your free copy of this special investing report now! 5 Stocks For Trying To Build Wealth After 50 Markets around the world are reeling from the coronavirus pandemic…And with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be daunting prospect during such unprecedented times.Fortunately, The Motley Fool is here to help: our UK Chief Investment Officer and his analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global lock-down…You see, here at The Motley Fool we don’t believe “over-trading” is the right path to financial freedom in retirement; instead, we advocate buying and holding (for AT LEAST three to five years) 15 or more quality companies, with shareholder-focused management teams at the helm.That’s why we’re sharing the names of all five of these companies in a special investing report that you can download today for FREE. If you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio, and that you can consider building a position in all five right away. 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. Kevin Godbold | Tuesday, 20th October, 2020 | More on: BWY 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. Simply click below to discover how you can take advantage of this. 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.center_img Our 6 ‘Best Buys Now’ Shares At a share price near 2,636p, housebuilder Bellway (LSE: BWY) is around 40% below its February peak. In that sense, it’s a cheap UK share. Although the price has bounced back a bit from its low in March when the coronavirus crisis first hit the stock market.Why Bellway became a cheap UK shareOf course, the market was anticipating the negative effect the pandemic would likely have on the underlying business. And today’s full-year results report sets out the extent of the short-term hit to operations. The figures are horrendous. For example, revenue dropped by almost 31% compared to the prior year and earnings per share crashed by just over 64%.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…The cost of stalled business and extra costs because of lockdowns was expensive for the company. The net cash position plunged from just over £201m the year before to just £1.4m. No wonder the stock market marked down the share price. But the good news is that operations are now back on track and the directors have reinstated shareholder dividends by declaring a full-year payment worth 50p per share.All of Bellway’s employees have now returned to work. Some are working from offices, some on building sites and some from home. The company kept paying all its staff full basic wages through the pandemic without calling on the government’s Coronavirus Job Retention Scheme. I reckon that speaks volumes for the underlying strength of the business.The poor figures in today’s report are historic and the investment opportunity now is all about looking ahead. And there’s been a “strong” start to the new trading and financial year. Overall reservations are up by almost 31% to 239 per week in the nine weeks since 1 August. And there was a “record” forward order book on 4 October worth almost £1,870m.A positive outlookThe directors reckon those factors combine with a “strong” work-in-progress position to provide a “solid platform for recovery in the year ahead.” Indeed, despite the ongoing pandemic, productivity levels are running between 85% and 90% of those achieved in the prior year.  The directors say Bellway has the “strategy and platform in place” to deliver long-term and sustainable growth.Even now, it has a robust balance sheet with a net cash position. Borrowings are modest at close to just £50m. That figure compares well with the pre-tax profit of almost £237m earned during the year. Meanwhile, the forward-looking earnings multiple for 2021 is just over 10, which I see as undemanding. City analysts expect a robust bounce-back in earnings next year of around 25%.I think the sector has good underlying fundamentals. There’s an ongoing demand for housing, which is being fuelled further by the current ultra-low-interest-rate environment. Indeed, mortgages remain cheap and available. So I’d consider investing in Bellway right now, along with its peers such as Persimmon, Taylor Wimpey, Vistry and others. Image source: Getty Images. Enter Your Email Address Cheap UK shares: why I reckon Bellway is a top recovery and growth play right now See all posts by Kevin Godboldlast_img read more