Are these the best cheap UK shares to watch in March 2024?

It’s official – the UK entered a recession in the second half of last year. According to Government figures, gross domestic product contracted by 0.3% in the three months to December, having previously shrunk by 0.1% between July and September. The Bank of England says it expects UK output to grow by just 0.25% in 2024 and 0.75% in 2025.

Chancellor of the Exchequer, Jeremy Hunt, says he expects inflation to ease later this year and economists think that the Bank of England may start cut interest rates in a few months. The Conservative Government is expected to call an election in autumn this year.

Meanwhile, the Israel/Hamas war in Gaza continues, as does the conflict in the Ukraine. In light of these issues, here are what we think may be some of the five best cheap shares to watch in March. These have been selected for recent market news.

Always do your own research. Past performance is not a guide to future performance.

Best cheap UK shares to watch

1. BAE Systems
2. Wickes
3. Rightmove
4. Barclays
5. GSK

BAE Systems (LON:BA.)

Defence contractor BAE Systems works with defence ministries around the world, including those in the UK, US, Poland and the Czech Republic. It recently unveiled a solid set of full year results, with revenues up 9% to £23 billion and a record order backlog of £69.8 billion, boosted by orders worth £37 billion last year.

The company recently bought UK drone specialist Malloy Aeronautics and US firm Ball Systems, which boosts its satellite design and production capability in the US. The shares are up 40% this year to 1,242p but with political turmoil unfortunately continuing around the world in the Ukraine and the Middle East, they remain worth watching. Analysts at broker Berenberg have a buy recommendation on the stock and they trade on a price earnings ratio of 19.6.

Wickes (LON:WIX)

Higher costs have hit the DIY retailer chain and half-year profits fell by 40%. However, as inflation eases, the company is seeing some improvement, with double-digit sales growth in Wickes’ TradePro business in its recent New Year trading update and resilient like-for-like sales coming in at last year’s levels. Wickes also says it is increasing its market share.

What’s more, the company has adjusted its earnings guidance, with adjusted pre-tax profits for the full year now predicted to be at the upper end of analysts’ forecasts. Wickes is also currently buying back £25 million of its shares. The shares are up 11% this year to 161p. They offer a dividend yield of 6.8% and are trading on a price earnings ratio of around 19.

Rightmove (LON:RMV)

Investors might expect Rightmove to be in the doldrums because of the struggling housing marketing and higher interest rate environment. However, the online estate agency has actually picked up extra work because its estate agent clients have been purchasing additional packages from the site in an attempt to boost sales of the properties on their books.

At the interim results last year, sales increased by 10% to £179.5 million (from £162.7 million in 2022), while pre-tax profits rose to £130.3 million (from £121.2 million in 2022). The shares are down 1% this year to 562p but are worth watching given their resilience and the likelihood of interest rate cuts later this year.

Barclays (LON:BARC)

Shares in Barclays have been struggling due to sluggish trading at its investment banking arm. The stock trades on a price earnings ratio of 4 – around half the valuation of most other banks. However, at the recent results, chief executive CS Venkatakrishnan unveiled a new strategy to boost revenues and the company also announced plans to return £10 billion to investors over the next three years.

Barclays also expects a recovery in deal-making will improve sales and plans to take £2 billion of costs out of the business by 2026. The shares are down 7% this year to 161p but are worth watching.

GSK (LON:GSK)

GlaxoSmithKline’s shares have underperformed AstraZeneca’s in recent years as sales of it Covid-related products have fallen off. However, its product pipeline is looking healthier and its vaccines business is performing well. At the recent full year results, vaccine sales rose by 25% to £9.9 billion, with new respiratory vaccine Arexvy delivering sales of £1.2 billion. Analysts expect it to be a blockbuster product and it is outselling rival Pfizer’s product Abrysvo.

Meanwhile, its shingles vaccine Shingrix grew sales by 17% to £3.4 billion. The company also has 12 new products in its pipeline and GSK expects a compound annual growth rate of more than 11% in adjusted operating profits between 2021 to 2026. It recently raised its forecasts for sales in 2031 to over £38 billion. Analysts at broker Berenberg have just increased their price target on the shares from 1,650p to 1820p.

How to invest or trade in cheap UK shares with us

1. Learn more about cheap UK shares
2. Open an account with us or practise on a demo
3. Select your opportunity
4. Choose your position size and manage your risk
5. Place your deal and monitor your trade

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