Here’s how I’d invest in value shares

first_imgSimply click below to discover how you can take advantage of this. 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. Enter Your Email Address Image source: Getty Images. 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. FREE REPORT: Why this £5 stock could be set to surge Peter Stephens | Saturday, 20th February, 2021 Value shares have been relatively unpopular for much of the last year. Investors have instead focused on companies that could deliver high earnings growth in what is expected to be a changed global economy post-coronavirus.As such, there may be buying opportunities among cheap shares in high-quality businesses. Through purchasing a wide range of them now and holding them for the long run, it may be possible to obtain index-beating returns. They could increase an investor’s chances of making a million.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…Buying high-quality stocks at cheap pricesThere is a great difference between cheap shares and value shares. The former are simply companies that trade at very low prices. In some cases, they can offer good value for money. Some might be high-quality businesses with solid financial positions and large competitive advantages. However, in other cases they may be trading at a cheap price because they lack those attributes, or because they face difficult operating conditions in the long run.Therefore, it is important to assess the quality of a business before buying it. Clearly, this will be very subjective. But it is likely to include consideration of a company’s balance sheet, strategy and market position relative to competitors. This could help investors deduce whether a company offers good value for money at its current price. All of these factors can have a large influence on its capacity to deliver improving profitability. As such, ensuring they are in place before purchase could be a means of reducing overall risks and improving potential rewards.Building a portfolio of value sharesMany value shares are priced at attractive price levels because they face temporary challenges. For example, at the present time they may face disruption from coronavirus lockdown restrictions that are unlikely to last forever.However, those threats can sometimes cause the downfall of a business. For example, they may be unable to adapt to a changing world economy in the long run, or new technology may make their products obsolete. This means there is a real threat that any value stock can lose money for investors, or even fold. This makes it extremely important to build a diverse portfolio of stocks that, together, can provide a high overall return. Otherwise, it is possible to have a portfolio that is overly concentrated and susceptible to poor returns from a small number of holdings.Making a millionAn investor who buys a diverse portfolio of value shares to match the return of the wider stock market could realistically make a million in the long run. For example, investing £750 per month at an 8% annual return would produce a portfolio valued at over £1m within 30 years.However, through buying value shares it is possible to outperform the stock market. This could help to bring a £1m portfolio in a shorter timeframe as the world economy and stock market recover. 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. Our 6 ‘Best Buys Now’ Shares Here’s how I’d invest in value shares Get the full details on this £5 stock now – while your report is free. See all posts by Peter Stephenslast_img read more

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