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Stock market crash: 3 cheap shares I’d buy to make a million

The Motley Fool logo The Motley Fool 02/08/2020 Rupert Hargreaves
a person standing posing for the camera: Coworkers standing near a wall © Provided by The Motley Fool Coworkers standing near a wall

The recent stock market crash may have dissuaded some investors from buying UK shares. However, purchasing undervalued shares after a market decline could prove to be a sound move.

Many highly successful investors, such as Warren Buffett, have used this strategy in the past to make money. 

As such, here are three cheap shares that could be worth adding to your portfolio after the stock market crash. 

Stock market crash bargains

Medical company Convatec (LSE: CTEC) produces essential products for the management of chronic conditions. This gives the business a defensive nature. 

At a time when so many other companies are reporting losses, Convatec is expected to report a healthy profit for 2020. Analysts are forecasting a 43% increase in earnings per share for the year. 

Despite this projection, shares in the healthcare company are currently dealing around 10% below their one-year high. This may suggest they offer a margin of safety after the recent stock market crash. 

Going forward, the company is planning to invest $150m to improve operations. This may lead to larger profit margins and more substantial growth rates in the years ahead. 

As such, now may be a good time to snap up a share of this business after the market crash as its growth starts to pick up. 

Spirent Communications

Spirent Communications (LSE: SPT) may be a great way to play the rollout of 5G networks across the country.

The company believes the world is only a third of the way through what could ultimately be a 12-year 5G cycle. This suggests the demand for its equipment and experience is only really just getting started. 

Analysts are forecasting steady growth for the next few years. If the company’s projection for a multi-year 5G rollout does come to fruition, this growth could last well into the late 2020s, and possibly early 2030s. 

Therefore, Spirent may have many years of growth ahead of it. The stock market crash has presented investors an opportunity to buy into this business at a low price. It might be worth snapping up a share of this telecommunications leader before growth picks up in the next decade.

XP Power

After any stock market crash, buying high-quality shares that produce a niche product or service can be a great strategy. XP Power (LSE: XPP) may fall into this bracket.

XP Power designs power supplies for blue-chip customers. It caters to four primary sectors, semiconductor equipment, technology, industrial, and healthcare.

All of these are relatively defensive sectors. Keeping the power on is essential for many businesses, so they’re unlikely to cancel orders with XP Power. 

As such, now to be a great time to take advantage of the recent stock market crash and buy shares in the company while they trade at a low level.

Analysts are forecasting a double-digit increase in earnings for the group this year, and a similar performance in 2021. That suggests shareholders could see a healthy return on their investment in the years ahead. 

A Top Share with Enormous Growth Potential

Savvy investors like you won’t want to miss out on this timely opportunity…

Here’s your chance to discover exactly what has got our Motley Fool UK analyst all fired up about this ‘pure-play’ online business (yes, despite the pandemic!).

Not only does this company enjoy a dominant market-leading position…

But its capital-light, highly scalable business model has previously helped it deliver consistently high sales, astounding near-70% margins, and rising shareholder returns … in fact, in 2019 it returned a whopping £150m+ to shareholders in dividends and buybacks!

And here’s the really exciting part…

While COVID-19 may have thrown the company a curveball, management have acted swiftly to ensure this business is as well placed as it can be to ride out the current period of uncertainty… in fact, our analyst believes it should come roaring back to life, just as soon as normal economic activity resumes.

That’s why we think now could be the perfect time for you to start building your own stake in this exceptional business – especially given the shares look to be trading on a fairly undemanding valuation for the year to March 2021.

Click here to claim your copy of this special report now — and we’ll tell you the name of this Top Growth Share… free of charge!

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Rupert Hargreaves owns no share mentioned. The Motley Fool UK has recommended XP Power. 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.

The post Stock market crash: 3 cheap shares I’d buy to make a million appeared first on The Motley Fool UK.


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