But does this now present an amazing buying opportunity to consider? Let’s see.

Confession time

I acknowledge that investing in the sector might not appeal to everyone, but I used to own BP shares. In fact, I sold them midway through the Iran war. Now, I’d like to claim that I got rid of them when the group’s share price was close to its 12-month peak, but I didn’t. However, I was content with my profit, having bought them for 362p a year earlier.

But readers of The Twelfth Magpie know that we always talk about the benefits of long-term investing. Timing the market’s a mug’s game. In light of this, selling my shares after only 12 months opens me up to the charge of hypocrisy. However, in my defence, I thought the war was about to end and that the oil price was close to its peak. The shares were last changing hands for more than 600p just before the Deepwater Horizon disaster in 2010.

However, if BP shares are so sensitive to the oil price, it begs the question: what’s the point of them? It’s impossible to predict future energy prices with any accuracy, therefore what’s the investment case for owning part of the oil and gas giant?

I can think of two reasons…

The bull case

Firstly, there’s its dividend. Based on amounts paid over the past 12 months, the stock’s currently (1 July) yielding 5.4%. This puts it in the top 13 of FTSE 100 dividend payers.

Of course, payouts are never guaranteed. In fact, the group’s dividend was cut after the tragic events of 2010, and by 50% during the pandemic. However, post-Covid, it’s been steadily increased once more. In dollar terms, the group’s most recently quarterly payment was 79% of its pre-cut level.

Secondly, compared to others in the sector, the stock’s trading at a lower earnings multiple. For example, if it was valued the same as Shell, BP’s share price would be 15% higher.

My view

So do I want to own BP shares once again? To be honest, not at the moment.

One of the unexpected consequences of the war is the lifting of sanctions that had prevented the export of Iranian oil. This decision might be reversed at a later date but, for now, it could be significant because the country’s believed to have the third-highest level of reserves.

Flooding the market with Iranian oil could have a big impact, especially when there’s already expected to be an over-supply when shipping movements in the Gulf return to normal. Some analysts are expecting Brent crude to fall to $55 a barrel. It was last at this level in early 2021, when the BP share price was around 250p.

At the moment, I think there’s more uncertainty than usual surrounding the oil price. On this basis, I think there are better opportunities to consider elsewhere, despite the obvious attraction of BP’s dividend.

Should you invest £5,000 in Bp P.l.c. right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Bp P.l.c. made the list?

James Beard does not hold any positions in the companies mentioned.

The post Back below 500p, is it time to consider BP shares again? appeared first on The Twelfth Magpie.

Motley Fool UK 2026

Many investors will worry that the bank will again struggle to sustain a move much further beyond this long‑standing barrier.

But looking at its strong profit forecasts, capital strength, and rising shareholder returns, I think there is room to go much higher.

So, how high is that exactly?

What’s fair value here?

‘Fair value’ is the true worth of any share, which reflects the long-term fundamentals of the underlying business. It is very different to ‘price’, which is the short-term figure buyers and sellers agree to deal on at any given time.

The difference between these two measures is key in long-term investors’ ability to produce outsized profits. This is because historically share price trend to their fair value over time.

In my experience as a senior investment bank trader, discounted cash flow (DCF) analysis is the best way of determining fair value. It does this by taking long-term cash flow projections for the underlying business and discounting them back to today. That produces a per-share current value.

Analysts’ estimates for the discount to be applied can vary, which can lead to differing DCF outcomes sometimes. But my DCF analysis — including an 8.4% discount rate — shows Lloyds shares could be 47% undervalued at their current £1.11 price.

That suggests a fair value of £2.09 — nearly double where they are now.

If the historical trend for share prices converging to their fair value continues, this represents a terrific potential buying opportunity today, if that DCF modelling holds good.

While-u-wait

In the interim convergence period, investors could expect to receive rising dividend payments. Forecasts are that the current 3.5% dividend yield will increase to 4.1% this year, 4.8% next year, and 5.6% in 2028.

So, a £20,000 holding on the forecast 5.6% as an average would make £14,968 in dividends over 10 years and £86,893 after 30 years. This also assumes the payouts are reinvested back into the shares to harness the full supercharging power of dividend compounding. And dividends can fall as well as rise over time, of course.

Nevertheless, at that point, the holding’s total value would be £100,893, which would pay an annual income of £5,650!

My investment view

I already have holdings in two other banks — HSBC and NatWest. Owning another would disturb the risk/reward balance of my portfolio. However, Lloyds is now on my watchlist to buy if either of these start to underperform. 

I think strong profit growth will power major gains in its share price long term. And I think it will support sustained increases in dividends, generating significant second income.

A risk to its profits is a sharper‑than‑expected downturn in the UK economy, which could lift loan impairments. Another is any tightening of regulatory capital requirements that might limit the pace of dividend increases.

Nonetheless, analysts forecast Lloyds’ profits will grow by a very robust 10.1% a year over the medium term at least.

Its latest results — Q1 2026 — saw profit before tax soar 33% year on year to £2bn. And management also restated its return on tangible equity target — a key profit marker for banks — of over 16% for the full year.

Should you invest £5,000 in Lloyds Banking Group Plc right now?

Simon Watkins owns shares in HSBC and NatWest.

The post Is there any value left in Lloyds shares now they’re over £1? appeared first on The Twelfth Magpie.

Motley Fool UK 2026

It is exempt from income and capital gains tax but also it allows withdrawals at any point, unlike private pensions. As from 6 April next year though, savers under 65 will face a 22% tax charge on interest earned from uninvested cash held within the ISA.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

Nevertheless, insurance and investment giant Legal & General (LSE: LGEN) continues to offer one of the most generous, well‑covered dividends in the index. And this is backed by robust cash generation, a capital‑light business model, and a progressive dividend policy aimed at increasing returns.

So, what sort of income am I targeting here?

What does the dividend policy mean for returns?

Legal & General’s progressive dividend policy is designed to increase payouts along with growth in earnings per share. But if there is a dip in earnings, the dividend is not automatically cut — it is held steady instead.

Since 2021, it has generated respective average annual dividend yields of 6.2%, 7.8%, 8.1%, 9.3%, and 8.3%. The variation in returns despite rising payouts underlines dividend yields can go down and up alongside changes in share price.

However, all these returns are way higher than the current FTSE 100 average of 3.1% and the FTSE 250’s 3.4%.

What are the forecasts?

Analysts project the firm’s dividend yield will rise to 7.8% this year, 8% next year, and 8.2% in 2028.

In income terms, the forecast 8.2% as an average would generate £25,284 in dividends on a £20,000 holding after 10 years. This also incorporates dividend compounding being used to turbocharge those dividend returns over time.

After 30 years on the same basis, the dividends would jump to £212,146. Including the initial £20,000 stake, the holding’s total value would be £232,146 by then.

And that would pay a yearly income of £19,036!

What about share price gains too?

Historically, share prices tend to converge to their ‘fair value’ over time. And the best way I have found of identifying this value is discounted cash flow (DCF) analysis.

This works by forecasting a company’s future cash generation and converting it into today’s value. When those forecasts are less certain, the discount rate applied increases. Consequently, different assumptions here can cause varied outcomes in analysts’ DCF modelling.

My DCF analysis — including an 11.6% discount rate — shows Legal & General is 55% undervalued at its current £2.86 price.

That puts fair value around £6.36 — more than twice the present level.

So, if share prices do continue to trend to fair value, and the DCF modelling holds good (which are not guaranteed), then the £20,000 holding would be worth £44,475.

My investment view

Ultimately, share price gains and dividend rises are driven by sustained increases in a company’s earnings.

A risk for Legal & General is a sharp downturn in financial markets that could squeeze fee income. Another is tighter regulatory capital rules that could reduce free cash flow.

Nonetheless, analysts forecast the firm’s earnings will grow at a very robust annual average of 14.6% over the medium term at minimum.

Given this, I will buy more of the shares very soon. And I also have my eye on similarly deeply undervalued stocks with high yields in other sectors too.

Should you invest £5,000 in Legal & General Group Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Legal & General Group Plc made the list?

Simon Watkins owns shares in Legal & General.

The post How much would I need in a Stocks and Shares ISA to target £19,036 a year in second income? appeared first on The Twelfth Magpie.

Motley Fool UK 2026

One reason is that the aerospace, defence and power systems giant has spectacularly underpromised and then overdelivered on its results. Another is that its three core business sectors have been reorganised to deliver outsized growth. Additionally, the firm has developed new revenue streams, including small modular reactors (SMRs).

So, does the share price still look undervalued now?

What’s Erginbilgiç’s nuclear vision?

Erginbilgiç thinks Rolls-Royce’s SMR business has “a trillion-dollar-plus market potential” that could eventually make it the UK’s most valuable company.

One part of this is the ongoing global energy transition to non-fossil fuels. Another is the huge energy demands of artificial intelligence and tech data centres, with Google, Microsoft, and Meta already aggressively looking to secure SMR-generated power.

Erginbilgiç projects the world will need around 400 SMRs by 2050, with each costing up to $3bn (£2.3bn). He believes Rolls-Royce’s decades of experience supplying the UK’s nuclear submarine fleet with reactors gives it an unrivalled competitive advantage.

He added: “There is no private company in the world with the nuclear capability we have. If we are not market leader globally, we did something wrong.”

What progress has been made?

On 15 June, Rolls-Royce was selected by Swedish utility Vattenfall to supply three SMRs. Rolls-Royce advertises its 470 MW SMR unit — the ones bought by Sweden — at roughly £1.8bn–£2.2bn per unit.

On 14 June, Rolls-Royce signed a trilateral deal with the UK National Nuclear Laboratory, and the Japan Atomic Energy Agency. This agreement is a core anchor of a landmark £18bn UK-Japan technology and investment package.

On 24 April, Czech state-owned utility ČEZ Group moved into the active engineering and planning stage of its SMR deal. The objective is to deploy up to 3 Gigawatts of power from six of Rolls-Royce’s standard 470 MW units, with a total value of £10.8bn–£13.2bn.

Do the shares still look cheap?

These nuclear contracts come when the group is forecast to deliver sustained revenue expansion and a dramatic uplift in returns.

A risk to these is any slowdown in wide‑body engine flying hours from softer long‑haul demand or airline capacity cuts. Another is any regulatory delay or funding bottleneck for its continued expansion.

Nevertheless, analysts forecast revenue will grow an annual average of 8.2% a year to end-2028 at minimum. And they project a stunning return on equity of 193% by that time too.

All this leaves its 19.7 price-to-earnings ratio — against a competitor average of 28.6 — looking even more of a bargain than it already did, in my view.

These firms include Northrop Grumman at 15.9, BAE Systems at 25.1, RTX at 34.6, and TransDigm at 38.9.

My investment view

I have wholeheartedly ignored short-term market noise about Rolls-Royce shares throughout their rise. Instead, I have focused, as I always do, on long-term fundamentals. As a result, I have done rather well.

I intend to keep pursuing this policy here, given Rolls-Royce’s superb broader prospects and the new growth that SMRs offer. As such, I will be adding to my holding again very shortly.

Should you invest £5,000 in Rolls-Royce Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Rolls-Royce Plc made the list?

Simon Watkins owns shares in Rolls-Royce.

The post After huge new nuclear deals, are Rolls-Royce’s sub-£15 shares set to power higher? appeared first on The Twelfth Magpie.

Motley Fool UK 2026

House builder Taylor Wimpey (LSE: TW) offers one of the most generous dividends on the FTSE 250 today. It’s forecast to yield 7.55% in 2026 and 8.93% in 2027. That’s far more than savers can earn from a best buy account, and there’s the chance of some share price growth on top. That brilliant combination of potential capital growth and dividend income is a key reason why shares beat almost every rival investment over time.

However, investors have to accept a bit of volatility along the way. Or, in the case of Taylor Wimpey, quite a lot of it.

Why have Taylor Wimpey shares plunged?

The housebuilding sector has had a rough ride for years. Too many young people can’t afford to buy a home, hitting demand and sales prices. Previously, they got support under the government-backed Help to Buy scheme, but that was axed in 2023.

At the same time, builders have been forced to absorb a big increase in employer’s National Insurance, alongside two inflation-busting minimum wage hikes and higher building material costs. Taylor Wimpey had to pay £435m in cladding fire safety remediation, following the Grenfell Tower disaster. Profits have taken a beating as a result. They hit £827.9m in 2022, but have been steadily sliding and totalled just £146.5m in 2025.

Given all these pressures, it’s hardly surprising that the Taylor Wimpey share price is down 30% over the last year, and 50% over five. While investors have got plenty of income in that time, the share price slump will have left many sitting on an overall paper loss. I hold the stock, and that includes me.

Many expected the Bank of England to continue cutting interest rates this year, sparking a property market revival. Unfortunately, the Iran conflict and subsequent oil price spike put paid to that. Yet, with growing hopes of peace, that could change.

If the oil price continues to fall, and inflation and mortgage rates slide too, then buyers may return to the market, driving up demand and sales prices, and ultimately, Taylor Wimpey’s profits. That’s still a very big ‘if’.

Can this beaten-down FTSE 250 stock recover?

Incredibly, Taylor Wimpey shares now trade at levels last seen in 2013, some 13 years ago. The stock looks pretty decent value, with a forward price-to-earnings ratio of 13.7, but I wouldn’t call it dirt cheap.

That is scope for recovery. On optimistic days for the wider stock market, Taylor Wimpey shares typically do quite nicely. But they also slump on the bad days. A UK recovery would help, but the economy continues to struggle and that’s unlikely to change this year.

The income is still the big attraction here, despite a recent cut to the dividend. If interest rates fall and the recovery kicks in, Taylor Wimpey could climb quite nicely from here, but that’s far from a done deal. I still think it’s worth considering for income seekers who are up for a challenge, but they should take a long-term view.

Should you invest £5,000 in Taylor Wimpey Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Taylor Wimpey Plc made the list?

Harvey Jones owns shares in Taylor Wimpey.

The post This 7.5% yielding passive income share is at a 13-year low! Time to consider buying? appeared first on The Twelfth Magpie.

Motley Fool UK 2026

Analysts expect more of the same in the coming years, giving the stock one of the most attractive income profiles in the leading index.

So, how much second income am I looking at from my current stake in the firm?

How does the growth momentum look now?

The foundation of dividend rises in any stock remains the underlying business’s fundamentals, particularly its earnings trajectory.

There are risks here for any firm, of course, with one for Standard being a sharper downturn in financial markets. That could reduce fee income and slow projected earnings rises. Another is a regulatory tightening in capital requirements, which could squeeze its margins.

That said, analysts forecast that Standard’s earnings will rise by a whopping annual average of 47.8% over the medium term at minimum.

Its full-year 2025 results released on 16 March this year showed IFRS adjusted operating profit jumping 15% year on year to £945m. Meanwhile, operating cash generation increased 5% to £1.474bn.

Management added that the firm — already the UK’s largest long-term savings and retirement company — should deliver another £500m of excess cash this year. And it reiterated it is on target to hit an adjusted operating profit of £1.1bn this year.

All this supports the company’s progressive dividend policy. It aims to lift the dividend in line with earnings per share growth. But if earnings slip in a particular year, the payout is kept at the existing level, not reduced.

So how much in dividend income?

Standard’s current dividend yield is 6.7% — more than double the FTSE 100’s present average of 3.1%. These returns can go up and down, of course, over time, as share prices and annual payouts change.

However, analysts forecast the firm’s dividend yield will rise to 7.1% this year, 7.3% next year, and 7.7% in 2028.

So, my £20,000 holding in the stock would make £23,089 in dividends after 10 years and £180,007 after 30 years. That marks the end of a standard investment cycle for long-term investors. It starts with first investments around 20 and finishes with early retirement options around 50.

The figures are based on the forecast of 7.7% as an average and on the dividends being reinvested in the shares. The process is called ‘dividend compounding’ and it effectively turbocharges these returns over time.

By the end of 30 years, the holding’s total value (including the £20,000 original stake) would be £200,007.

And that would deliver a yearly income of £15,401 by that point!

My investment view

For me, the combination of rising earnings, strong cash generation and progressive dividend policy makes Standard Life a compelling long‑term income anchor. The business is throwing off more excess cash each year, and management has shown a consistent commitment to returning that to shareholders.

The forecast yield climbing towards 7.7% only strengthens the case for building a larger second‑income stream over time. And with the company’s growth momentum still firmly intact, those payouts look well supported for the foreseeable future.

That is why I am continuing to add to my holding. And it is also why I think the stock deserves serious consideration from any investor focused on long‑term, reliable income.

Should you invest £5,000 in Standard Life right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Standard Life made the list?

Simon Watkins owns shares in Standard Life.

The post How much would I need to invest in this FTSE 100 dividend star to aim for £15,401 a year in second income? appeared first on The Twelfth Magpie.

Motley Fool UK 2026

Yet Persimmon‘s (LSE:PSN) a share with a big yield worthy of serious consideration. Trading conditions are worse than they’ve been for years, causing the housebuilder to tumble in value. But has the market become far too pessimistic? I think so.

For transparency, I hold Persimmon’s shares in my Stocks and Shares ISA. Over five years it’s slumped 63% in value, leaving me with a nasty paper loss. But here’s the thing: over time, I’m expecting it to rebound. And in the meantime, investors can possibly lock in a mouth-watering dividend income.

How so?

Out of the FTSE 100’s big-hitting income shares, Persimmon’s been something of a mixed bag of late. Annual payouts were cut in 2023, to 60p per share in response to higher interest rates and slowing home sales. They’ve remained at that level since, leaving investors’ income vulnerable to inflation.

Yet on the plus side, this — combined with a sharp share price drop — still means those buying Persimmon shares have snared sky-high yields around and above 6%. To put this in context, the FTSE average has been much closer to 3%.

What makes Persimmon such a special share today is its dividends are tipped to start growing again, to:

• 62.23p per share in 2026.
• 66.46p next year.
• 69.48p in 2028.

Consequently, dividend yields range from 5.6% to an enormous 6.3% for the period.

Cash and cover

The question is, of course, how robust are these forecasts? And especially as stress grows in the UK housing market? Latest Zoopla data shows buyer demand down 15% year-on-year due to “the combination of political uncertainty and higher borrowing costs”.

Persimmon’s share price could fall further if this persists. But I’m confident it won’t impact the company’s dividends. Dividend cover ranges 1.6 and 1.7 for the next two years, below the ideal security benchmark of 2. Yet that cover is far from terrible, and besides, the housebuilder has a strong balance sheet it can utilise for near-term dividends.

Also, it has no debt and — as of last December — healthy net cash of £117m.

Is Persimmon a FTSE 100 share worth buying?

Importantly, Persimmon has so far avoided the broader housing market slowdown too, or at least that’s according to latest financials.

It said on 30 April that it had started the year well… with an improved private sales rate and an increase in average selling prices. “As a result, our private forward sales are up 7% on the prior year“, it added.

This is no accident, reflecting Persimmon’s focus on affordable homes. And this should support healthy earnings in the current part of the cycle.

Hargreaves Lansdown also notes that its homes “are typically priced around 19% below the newbuild national average, [meaning] sales tend to be more resilient in times of uncertainty“.

Though there’s risk, I think Persimmon should remain one of the FTSE 100’s best-paying dividend shares. And I expect its share price could rebound when market conditions improve.

It’s not the only passive income hero that’s caught my eye though…

What income stock do we like better than Persimmon Plc right now?

One of our Share Advisor analysts has just released a brand new stock report that we think is a must-read for any investor looking to try and generate potential income.

And the best bit is that you can see if for yourself, right now, absolutely free of charge!

No jargon. No hard sell. Just a clear look at an income share we think is worth your time.

Royston Wild owns shares in Persimmon.

The post Down 63% and yielding 6.3%! Is this FTSE 100 share a brilliant bargain? appeared first on The Twelfth Magpie.

Motley Fool UK 2026

But when I look at global stock markets today, I see bubbles inflating everywhere. For example, South Korea’s KOSPI index has soared an astonishing 176% in 12 months. Also, the US stock market is hitting valuation levels not seen since 1929, just before the infamous Wall Street Crash. Then again, UK shares still look cheap to me, including this one…

A great British business?

One old City of London expression reads, “Fund managers talk up their own books”. In other words, investors tend to sing the praises of shares they already own.

For example, my family portfolio owns the stock of Bunzl (LSE: BNZL), whose shares have endured a rough ride since hitting all-time highs almost two years ago. On 18 September 2024, this FTSE 100 share peaked at 3,732p, but then began tumbling.

At its 52-week low, Bunzl stock bottomed out at 1,981p on 21 January, down a whopping 46.9% from its record high. Back then, I’d loved to have bought into this British supplier of disposable goods to other businesses.

Bunzl describes itself as a leading distribution and outsourcing company for food-service providers and food retailers. Its products include safety and hygiene equipment, chemicals, packaging, disposable tableware, personal protective equipment, and cleaning machinery.

For decades, Bunzl was a British success story, boosting its earnings through acquisitions and organic growth across North America, the UK and Ireland, Continental Europe, and the rest of the world (mostly Australasia).

Bunzl bounces back

My family owns this Footsie stock, paying 2,292p a share for our stake on 16 April 2025 — a day when the share price collapsed by 25.6%. I saw Bunzl as another ‘fallen angel’ — a solid, well-run company with temporarily depressed shares.

As I write, Bunzl shares stand at 2,638p, valuing this group at under £8.6bn. At this level, the stock trades on an undemanding 18.7 times historic earnings, generating an earnings yield of 5.3%. This means that the dividend yield of 2.8% a year is covered a healthy 1.9 times by trailing earnings.

Bunzl shares are up 27.1% in 2026 — just the kind of comeback I was hoping for. But while the stock is up 13.7% over one year, it has risen by a mere 8.6% over five years (dividends excluded).

I’m holding tight

My family’s Bunzl stake has a paper gain of 13.1%, excluding reinvested dividends. But I have no intention of selling these shares, because I see Bunzl as a prime candidate for powerful private-equity buyers.

With revenues and earnings stabilising and recovering, this ‘boring, undervalued’ company could become a takeover target. Indeed, activist investor Elliott Investment Management recently joined the shareholder register.

Of course, Bunzl might endure yet more quarters of weaker growth and lower margins, hitting its revenues, earnings, and cash flows. But this 172-year-old FTSE 100 firm has been around since 1854, so I think there’s plenty of life left in old Bunzl yet!

Here’s another exciting income stock on my radar…

What income stock do we like better than Bunzl Plc right now?

One of our Share Advisor analysts has just released a brand new stock report that we think is a must-read for any investor looking to try and generate potential income.

And the best bit is that you can see if for yourself, right now, absolutely free of charge!

No jargon. No hard sell. Just a clear look at an income share we think is worth your time.

Cliff D’Arcy has an economic interest in Bunzl shares.

The post Up 27.1% in 6 months: a FTSE 100 share paying out 2.8% a year! appeared first on The Twelfth Magpie.

Motley Fool UK 2026

Look at the market for mergers and acquisitions, however, and a different impression may emerge. Would-be buyers – including many sophisticated global companies – have been queuing up to try and purchase UK firms.

That suggests that, in at least some cases, well-informed buyers may actually see well-known UK shares as offering good value.

Taking advantage of weakness – or spotting good value?

Take easyJet (LSE: EZJ) as an example.

It has recently received multiple offers from a single potential suitor.

So far it has not accepted any of them. It is, though, now providing some limited information to the company.

That suggests that easyJet’s board is taking the prospect of a possible takeover seriously, even if they are resistant to what is on the table so far.

The easyJet share price remains substantially below the most recently publicly revealed offer. I interpret that as suggesting that the City may have doubts about the likelihood of any deal being made.

The firm has described the bid as characteristic. In other words, the takeover approach may be taking advantage of a share price weakened in recent months by risks connected to the conflict in the Middle East, such as jet fuel price volatility and weakened demand for holiday air travel.

On the other hand, that is often the case when investing: buyers look to buy into a business when they see a potential mismatch between the price and what they believe its long-term value to be.

On the hunt for bargains

I think there is a lot to like about easyJet as a business.

It has a business model that, although somewhat seasonal, has proven it can be cash generative over the long run.  It has an established customer base, strong brand and future growth opportunities.

I have recently been buying the shares, in part because some of the risks I had associated with it in recent months look to me as if they may be receding. Jet fuel having become more affordable is a case in point.

But it is not the only UK share I have been buying over recent months in the belief that there is a mismatch between a business’s current price and what I think its long-term value ought to be.

I am trying to avoid buying shares just because they have a low price. Rather, I am looking for what I believe are excellent businesses but whose share price does not seem to reflect that accurately and fully.

Even in this market, while some investors fret about AI valuations and the prospect of a bubble, I see plenty of UK shares I think fit the bill.

Should you invest £5,000 in easyJet Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if easyJet Plc made the list?

Christopher Ruane owns shares in easyJet.

The post Could now be the time to buy great UK shares at bargain prices? appeared first on The Twelfth Magpie.

Motley Fool UK 2026

Yet, despite my enthusiasm, this growth stock hasn’t done much growing since I first invested last year. In fact, it’s now down 7% in total after falling 25% year to date.

But if Wall Street forecasts are anything to go by, my patience could be rewarded handsomely by this time next year. That’s because the average 12-month target is just under $53 — roughly 51% above the current level.

Why might On stock be undervalued at $34?

Initially sceptical

Confession: when I first started looking at the Swiss running shoe company last summer, I wasn’t entirely convinced.

That’s because there have been a handful of new kids on the block in the global premium athleisure market over the last decade or so. And after being popular for a few years, these brands have faded, resulting in very poor stock market returns.

Here are three that spring to mind (five-year performance):

• Under Armour: −71%
• Lululemon Athletica: −69%
• Smartbird (formerly Allbirds): −99%

Differentiating factors

So, what makes On potentially different? Well, Lululemon and Allbirds started with a single lifestyle angle (premium yoga pants and environmentally friendly footwear, respectively). But when fashion tastes shifted, they struggled to pivot.

Fist and foremost though, On has established itself as a hardcore performance running brand, building credibility with professional marathoners. And runners tend to be loyal to quality gear that protects their feet and joints.  

As for Under Armour, it started selling products at a discount to boost quarterly sales targets, which damged its premium brand image. But On manages its wholesale partnerships like a luxury brand by limiting which retailers can stock the shoes.

It very rarely does discounts, which has led to an industry-leading gross margin (64.2% in Q1, despite tariff pressures). 

Third, founder-led On stands out from the crowd in terms of innovation, as evidenced by the following two patented technologies: 

• CloudTec: the cloud styles on the trainer soles are a patented cushioning system to reduce muscle fatigue and boost performance.
• LightSpray: a robotic upper-manufacturing arm sprays a single continuous filament onto a sole inside three minutes, eliminating seams and waste.

The advanced engineering and serious attention to detail makes me believe this is not a flash-in-the-pan brand.

Finally, there’s China, where Western brands like Nike are struggling badly due to the popularity of domestic rivals. Yet in Q1, China helped On’s Asia Pacific sales rocket 61.4% on a constant currency basis, making up more than 20% of total global sales.

What about valaution?

As mentioned though, the company charges full whack for its premium products. So any further deterioration in consumer spending power, including potential AI-related job losses, is a risk to growth moving forward. Tariffs also add uncertainty.

For me, though, the company’s guidance for at least 23% full-year sales growth even in a challenging environment is impressive. And its apparel business is only just getting started, with a multi-year growth runway ahead.

Finally, the icing on the cake is that the shares can currently be picked up for a very reasonable 21 times forward earnings.

At this price, I think the stock is worth considering as part of a diversified SIPP/ISA.

Should you invest £5,000 in On Holding right now?

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Ben McPoland owns shares in On Holding.

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