But the younger someone starts squirreling money away into a pension, the longer the timeframe they have to put it to work trying to build wealth for retirement. That is true of a SIPP too.

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.

Taking a long-term view towards investing

While most of us know or can see why having time on our side when it comes to investing could help us, people still procrastinate.

When it comes to pensions, payout may be decades away, so what is another year or two of waiting before starting one?

The answer can be considerable, as over the long term, compounding can be more powerful.

Someone who puts money into a SIPP cannot withdraw a penny until they hit 55 (and that age is set to rise). That may seem like a disadvantage but I see it as an advantage in the sense that it reinforces the long-term approach to investing.

Tax relief means you can invest more than you put in

A big advantage of a SIPP as I see it is the tax relief it offers. The words ‘tax relief‘ may already lead some people to switch off. But that could be a costly mistake, as this is effectively free money.

By topping up contributions, the Exchequer enables an investor to have more money in their SIPP to invest than they contribute. The exact amount depends on income tax rate: higher and additional rate payers can benefit even more handsomely than basic rate payers.

But across the board, this is a substantial and tangible benefit of the SIPP structure, in my opinion.

Money can grow tax free

What about the money that is in the SIPP? Inside the wrapper, it can grow free of Income Tax or Capital Gains Tax.

Now, that is also true of an ISA — and withdrawing money from a SIPP can be subject to more onerous tax treatment than when taking money out of an ISA.

Still, over the long term, being able to accumulate dividend income and capital gains free of tax inside either a SIPP or ISA wrapper could be a significant benefit.

One share in my SIPP

One of the holdings in my own SIPP is B&M European Value Retail (LSE: BME). Its share price jumped in the past week following the release of preliminary results that suggested a turnaround strategy may be starting to bear some fruit.

Personally I did not think the results were strong, but the lack of any nasty surprises seemed to reassure the City that perhaps the worst is behind the discount retailer as it tries to put weak sales in parts of its UK business behind it.

I think investors need more time to know with confidence whether that risk has passed. Still, with the B&M share price 61% lower than five years ago, I think it is priced in.

The company is solidly profitable, has a proven business model and is a strong brand.

I believe its focus on price competitiveness could help lift sales in an environment of weak consumer confidence so it may be one to consider.

Should you invest £5,000 in B&M European Value 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 B&M European Value made the list?

Criristopher Ruane owns shares in B&M European Value Retail.

The post Not sure what a SIPP is? 3 reasons it could pay to know! appeared first on The Twelfth Magpie.

Yet today (Wednesday 3 June), the battered retailer is leading the FTSE 250 higher. At 196.7p, it’s up 15% in mid-week trading following a hugely encouraging full-year update.

Is the recovery now on?

First things first…

Trading numbers for the last financial year (to March 2026) were grim, though earnings did come in a little ahead of forecasts.

Sales were up 3.6% year on year, but the firm had new sites and a stronger performance at B&M France to thank for this. Like-for-like sales across the Channel rose 2.9% over the year.

But significant problems persisted at B&M UK, where like-for-like sales dropped 0.1%. Trouble for its core British operation meant pre-tax profit tanked 47.3%.

Chief executive Tjeerd Jegen described financial 2026 as”

A difficult year that saw profits fall due to a challenging market and execution issues.

He’s not wrong.

Green shoots?

So why have investors piled into B&M shares following today’s release? It seems they’re now beginning to buy into the company’s ‘Back to B&M Basics’ recovery plan launched in October.

Jegen noted that:

The past six months has seen us sharpen our pricing, improve on-shelf availability in best-selling brands and revamp our in-store promotions.

Elsewhere, discontinued lines are being cleared, and the number of products in the fast-moving consumer goods (FMCG) category was slashed.

The result? B&M said that adjusted EBITDA so far this year is “at the midpoint of our current guidance.” Debt is also falling, pulling the firm’s leverage back within its target range of 1–1.5 times.

“This is a solid financial base from which to move forward with our growth plan and enable future shareholder returns,” the retailer commented.

More to come?

The question is, might B&M be at the start of a glorious turnaround?

Analysts at RBC Capital note that”

B&M should benefit from consumers remaining value conscious and should have some runway for growth given it has only 2% share of UK retail overall.

The retailer’s ongoing restructuring plan leaves it in better shape to seize this opportunity too. The next phase will see it trial new store formats, with an online channel and loyalty programmes potentially coming further down the line.

But success is far from guaranteed. B&M’s focus on value hasn’t saved its bacon in recent times, with the cost-of-living crisis hitting almost all retailers. What’s more, competition in the segment is fierce and growing, putting future sales and margins in jeopardy.

Time to buy B&M?

That said, B&M shares are still cheap despite today’s price jump, The forward price-to-earnings (P/E) ratio is just 8.9 times. I want to see more signs of recovery before investing myself. But it might be a great turnaround stock for more adventurous investors to consider.

Should you invest £5,000 in B&M European Value 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 B&M European Value made the list?

Royston Wild does not hold any positions in the companies mentioned.

The post Up 15%, B&M shares are leading the FTSE 250 higher! Is the comeback on? appeared first on The Twelfth Magpie.

Step forward to today, though, and that share continues to look cheap. Or does it?

Well-known retailer focused on price

The share in question is B&M European Value Retail (LSE: BME).

This FTSE 250 company is well-known by millions, thanks to its nationwide chain of shops.

At the interim point in its current financial year, it reported that revenue was up 4% to £2.7bn. But that growth came at a cost: profit before tax more than halved. Still, it came in at £75m.

Profits have come under strain because B&M is operating in a highly competitive market and some of its pricing has not been attractive enough for customers.

Cutting prices eats into profitability and I see that as an ongoing risk given the market in which B&M operates.

Could there be good news on the horizon?

Still, B&M is well aware of these challenges and is taking measures it hopes can address them.

In the company’s most recent trading update, the chief executive said, “I remain confident that the actions we are taking will restore sustainable like-for-like growth at B&M UK over the next 12 to 18 months and provide a strong foundation for future growth“.

That sounds like a long wait to me.

I am a long-term investor, but I would like to see more evidence sooner that the turnaround strategy’s focus on things like on-shelf availability and the number of products carried in a store is delivering meaningful financial change at scale.

B&M has proven over the years that it can appeal to shoppers, generate sizeable sales, and make a handy profit. I still think the basics are in place.

If the current approach to fixing the business delivers, that could provide good news that helps to boost the value share.

Here’s my concern, though

But what if it does not?

It is not as if B&M management were not aware of the situation prior to the tenure of the current boss.

Putting money into cutting prices can help woo some shoppers, but it is only one part of the overall picture. It eats directly into profit margins even for sales that would have been made anyway.

It is very difficult if not impossible for a retailer like B&M to target instore pricing so that it adds new sales without reducing the profitability of existing ones.

Other factors beside price have likely hurt B&M, including instore product availability.

A weakening economy could play to its strengths as a discount retailer, but they might also force the company to become even more competitive on price if rivals do, further reducing profit margins.

To me this looks like a value share. But if simple price fixes are not enough to restore sales growth at an acceptable level of profitability, it could yet turn out to be a value trap.

A 49% share price decline over the past year suggests many investors have lost faith in the investment case. I am hanging on for now but will not be buying any more shares.

Should you invest £5,000 in B&M European Value 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 B&M European Value made the list?

Christopher Ruane owns shares in B&M European Value Retail.

The post With a P/E ratio of just 7, could this value share actually be a value trap? appeared first on The Twelfth Magpie.

More accurately: you can rush them, but it’s a really bad idea. And I should know – I’ve done all three.

Some things take time

Some things in life just take time. If you’re trying to lose 10% of your body weight, it’s probably not advisable to try and do it all in a day. 

Likewise, you can try to write a PhD thesis in a week if you really want to. The trouble is it’s likely to be a lot worse than if you take more time.

It’s always natural to look for ways to do things more efficiently. But some things just don’t work as well if you try to do them quickly.

Earning passive income is one of these. There are stocks with huge dividend yields that offer big returns in a hurry.

The trouble is, taking the approach of piling into these is often a risky business. And doing so can be detrimental to your wealth.

18.2% dividend yield?!

As an example, consider B&M European Value Retail (LSE:BME). Right now, the stock comes with a massive 18.2% dividend yield.

That’s enough to turn £20,000 into £3,640 a year in passive income straight away. But investors do need to look a bit more closely.

One thing to note is that the dividend per share has fallen by 32% since 2022. That’s a sign things are moving in the wrong direction.

On top of this, the firm’s free cash flows are barely covering its dividend. And that’s not including what it spends on lease payments. 

That’s not to say B&M is a terrible business. It maintains some pretty impressive operating margins for a retailer. 

It is, however, to say that investors need to look at more than that 18.2% dividend yield. And they should certainly think about how sustainable it is.

A better option?

By contrast, I think Tesco (LSE:TSCO) is a stock that is worth considering. The underlying business looks like it’s in much better shape.

Compared with B&M, Tesco has much narrower operating margins. And that creates a risk of inflation cutting into profits. 

The firm, however, has some huge advantages that keep it moving forward. The most obvious is its massive scale. 

Tesco uses this to negotiate lower prices with suppliers. And it uses its lower costs to offer better value to consumers. 

Complicated it isn’t. But it’s an incredibly effective strategy in an industry where retaining customers is very difficult.

The dividend yield is currently 3.5%. That’s a lot lower than 18.2%, but it looks like a much more durable passive income opportunity to me.

Don’t rush

Some things in life just take time. And earning passive income is one of them. 

With £20,000, investors can find stocks offering an 18.2% dividend yield. But that doesn’t mean they should buy them.

The way to target £3,640 a year in passive income is to find long-term opportunities and let them grow. Over time, that’s likely to work better.

The post How to invest £20,000 to aim for £3,640 a year in passive income appeared first on The Twelfth Magpie.

That prolonged price weakness means many top UK shares carry extremely high dividend yields. Plenty also change hands for rock-bottom price-to-earnings (P/E) ratios.

Let me talk you through two cheap dividend shares that have caught my attention: B&M European Value Retail (LSE:BME) and Investec (LSE:INVP). But are they irresistible bargains or classic income traps?

B&M European Value Retail

B&M shares trade on a forward P/E ratio of 7.8 times. They carry a dividend yield of 6.1% for this year too.

That’s very attractive at first glance. However, I think investors need to take care before considering this income stock. Why? Its sky-high dividend yield today is a product of its sinking share price. Over a 10-year horizon, B&M’s yield consistently ranged far lower, at between 2% and 3%.

The value retailer’s been battered by:

• A series of profit warnings as weak consumer spending has battered revenues.
• Accounting errors that have dented investor confidence.
• Rising costs, including greater labour and freight expenses.
• High-profile management departures.

The problem for me is B&M isn’t showing signs of turning the corner… at least not yet. Like-for-like sales at the core B&M UK division dropped 0.6% in the December quarter. Can it recover as the cost-of-living crisis endures? I’m not convinced.

On the plus side, this year’s expected dividend is covered twice by anticipated earnings, providing a strong layer of protection. However, there’s a strong possibility that B&M’s share price will continue sliding, in my view. I’d rather search for other high-yield stocks to buy.

Investec

Investec’s forward dividend yield is 6.4%, more than double the current average for both the FTSE 100 and FTSE 250. It also carries a low P/E ratio of 8 times.

Risks have risen following the start of the Iran War. With the return of inflation threats and the global economy showing signs of stress, the danger of more credit defaults and reduced loan demand has grown. And so Investec’s shares have fallen in value.

However, I think the bank deserves serious attention at these prices. And especially from passive income investors — in my view, current dividend forecasts look rock solid. This year’s predicted payout’s covered two times by anticipated earnings.

What’s more, Investec’s CET1 capital ratio sits at 12.3%, comfortably above regulatory requirements and which should support more market-beating dividends.

Investec’s raised its annual dividend in 12 of the last 13 years. And over the last decade, the dividend yield has regularly averaged a healthy 4%–6%. Unlike B&M, it has a long record of offering attractive yields.

Can the bank keep delivering market-beating dividends? I’m optimistic it can, underpinned by rising demand for financial services, and especially wealth management in which it’s expanding. I think it’s a top income stock to consider.

The post 6%+ dividend yields and low P/Es! Are these income shares screaming buys? appeared first on The Twelfth Magpie.

Past performance is not necessarily a guide to what may happen in future. But it can still provide an interesting perspective on how UK shares have fared over time.

The FTSE 100 has been doing well

Take the flagship FTSE 100 index of leading blue-chip shares, for example.

Over the past decade, it is up by 67%. So, someone who put £15,000 in back then ought now to be sitting on a portfolio worth a little over £25,000.

Not only that, but there have been dividends along the way.

Today, the index yields 3.1%. But someone who invested a decade ago would be earning around 5.1%, thanks to the growth in the index price over those 10 years. So they ought to be earning close to £780 per year in dividends.

Plus, they would have earned dividends every year in the past decade.

Dividends at a company are never guaranteed and one of the benefits of investing in a diversified group of 100 firms is that any one company cutting or cancelling its payout has a limited impact on the overall yield of the index.

What about the FTSE 250?

Of course, the FTSE 100 only represents some of the London market.

The FTSE 250 is composed of small and medium-sized firms. Over the past five years, it is up – but only by 1%!

So, £15,000 invested five years back would now be worth around £15,150.

There is a dividend and, currently standing at 3.9%, the yield is more attractive than the FTSE 100 one. On £15,000, that yield would provide around £585 of passive income per year.

Looking beyond index tracking

It might seem that the lesson is that bigger is better. But a five-year historical snapshot is not necessarily indicative of what to expect in future. I own FTSE 250 as well as FTSE 100 shares.

One way to invest in an index (like either of those) is to buy shares in a tracker fund. An alternative approach can be buying individual UK shares, although when I do this I still make sure my portfolio remains diversified.  

Lots of people buy individual shares thinking they can beat the index, but in practice this can be more difficult than it looks.

For example, consider my investment in B&M European Value Retail (LSE: BME).

While the FTSE 250 index has not done much in the past five years, it has at least done far better than B&M. The FTSE 250 retailer’s share price has collapsed 68% during that period. Ouch!

The 7.5% dividend yield is close to double the FTSE 250 average. But even taking that into account, the share has destroyed, not created, value for shareholders over the past five years.

I bought during that price fall, so my loss to date is smaller, but I remain in the red on this particular UK share. B&M has struggled to compete well enough on price in recent years and I see that as an ongoing risk.

But at seven times earnings, I see the current price as a possible bargain and have no plans to sell.

B&M has a large customer base and economies of scale that could potentially help get it back on track.

The post £15,000 invested in UK shares a decade ago is now worth… appeared first on The Twelfth Magpie.

Because they’re smaller, they often use generous payouts to attract new investors and support their share prices. That can work well, but it also raises the risk of a dividend cut if profits or cash flow fall short. So it’s critical to check the company’s track record and how well the dividend is covered.

Three names that caught my eye recently are MONY Group, B&M European Retail (LSE: BME) and Aberdeen Group. Between them, their average yield comes in at around 7.5%, more than double the FTSE 250’s overall average. That could give a serious boost to an income-focused portfolio.

Here’s why I think they’re good picks to consider.

Highest yield, stretched coverage

Offering the highest yield of the three at 7.8%, MONY Group’s supported by a 19-year payment record. Its earnings cover the dividend by 82.4%, which is tighter than I’d like but still adequate, in my view.

Cash coverage of 1.7 times tells me the business is turning enough profit into cash to fund the payout, though there isn’t a huge margin for error. The main risk here is a downturn in trading or rising costs squeezing that cushion and forcing management to reset expectations.

Moderate yield, strong coverage

B&M European Retail brings a 7.5% yield to the table, backed by 11 years of dividends. That’s shorter than MONY’s history, but still a decent track record for a retailer.

Payouts only make up 53.2% of earnings, which is excellent, and is further backed by cash coverage of 2.1 times.

What’s particularly attractive about BME right now is the low valuation. With a price-to-earnings (P/E) ratio of only 7 and a price-to-sales (P/S) ratio of 0.32, it looks very cheap. That adds significant price growth potential to the mix.

The obvious risk is the consumer backdrop: if inflation picks up again or real wages come under pressure, shoppers may rein in spending and hurt profits. Retail is also highly competitive, so any misstep on pricing or stock could dent performance.

Lower yield, best track record

Aberdeen Group has the lowest yield of the trio, at 7.3%, but it combines that with excellent safety indicators. It boasts a 20-year payment history, with earnings coverage of 67.4% and cash coverage of 2.3 times.

That mix of longevity and strong cash support makes the payout look highly reliable. But asset managers can be sensitive to market swings and investor sentiment. A sharp fall in markets, or sustained outflows from its funds, could still threaten future payments.

Final thoughts

For investors targeting sustainable income, this 7.5%-yielding mini-basket is an example of how to identify promising mid-cap stocks. On balance, I think all three shares offer attractive income potential, with different trade-offs between yield and safety.

As always, it’s best to spread investments across various sectors to avoid relying on any single dividend. I’m also interested in a few FTSE 100 shares that could add a level of defensiveness.

The post Yielding 7.5%, these 3 FTSE 250 dividend shares are a passive income investor’s dream appeared first on The Twelfth Magpie.

Yet, there’s a slight catch here. So I’ll break down exactly what investors need to watch out for.

A divisive opportunity

Depending on which analyst report you read, B&M’s either a deeply bottomed-out classic value stock or a massive value trap heading even further south. And the trouble is, there’s evidence to support both arguments, creating a fairly split opinion among the experts.

So how did we get here?

The collapse of B&M shares stems from a series of cascading problems, including an inventory glut, subsequent profit warnings, an accounting error, and CEO and CFO departures.

It goes without saying that’s the exact opposite of what investors want to see from a business. Even more so, given that these operational mistakes have resulted in B&M losing market share at a time when the wider discount retail industry has been thriving.

But with new leadership at the helm, is there hope for a turnaround, or is it still all downhill from here?

Bull versus bear

Even with weakened earnings projections for 2026, B&M shares are still exceptionally cheap with a forward price-to-earnings ratio of just 7.4. It’s one of the lowest valuations in the sector. And it’s why even at an 8.3% dividend yield, shareholder payouts are actually still comfortably covered by cash flow.

What’s more, this coverage could soon start steadily improving under new CEO Tjeerd Jegen. It’s still early days. But his ‘Back to B&M Basics’ plan of simplifying the product range, cutting prices, and improving value perception among consumers has begun delivering results.

Organic UK like-for-like growth’s starting to move back in the right direction. And at the same time, B&M’s expansion efforts in France are seemingly firing on all cylinders, delivering double-digit growth reminiscent of the group’s historical UK performance.

The question now is, was the recent boost to organic growth driven by genuine improvement, or was it due to the trading period covering the Christmas shopping season?

That’s one of the key arguments that bearish investors are making right now. Suppose the next set of results shows negative or even just slower like-for-like growth? In that case, it suggests that Jegen’s strategy may simply not be enough to recapture lost market share.

In such a scenario, that likely means more pressure on earnings and, in turn, the dividend yield. So where does that leave investors today?

The bottom line

While there are some early signs of improvement, the seasonality impact makes it difficult to determine whether this was due to improved strategy or merely a temporary blip.

Investors will soon find out in the coming quarters of 2026. But given the firm’s poor recent track record of delivering on its promises, I think the wiser move right now is to be patient and wait to see how the situation unfolds.

Therefore, even with a tasty-looking, cash-covered dividend yield, I think there are far more promising income opportunities to explore elsewhere.

The post Does a 7%+ dividend yield make B&M shares a slam-dunk buy? appeared first on The Twelfth Magpie.

Despite most discount retailers thriving in a high cost-of-living environment, B&M found itself being left behind due to strategic missteps. And investors have punished the FTSE stock severely, with over 70% of its market cap wiped out between the start of 2024 and the end of 2025.

Yet in 2026, the tide might finally be turning. Why? Because B&M shares are actually beating the market!

A discounted discounter

Less than a quarter into 2026, and B&M shares have steadily ramped up by 6%. And a £5,000 investment at the start of January is now worth £5,300.

By comparison, the FTSE 100 has only mustered a 3.6% return so far this year. And the FTSE 250 has been even weaker with a 1.1% loss.

So, why are B&M shares now outperforming?

The momentum seen so far is being driven by a variety of factors. However, it essentially boils down to a recovery bounce after years of catastrophic decline.

Accounting errors, inventory gluts, and a string of profit warnings under previous leadership have done a lot of damage to both the business and investor confidence.

But with a new CEO at the helm, hope of a turnaround has started to emerge. And with B&M shares now trading at a dirt-cheap price-to-earnings (P/E) ratio of just 7.3 compared to the wider retail industry average of 18.5, value investors have started taking notice.

The start of a comeback?

Earlier this year, B&M published its latest quarterly results covering October to December 2025. The results were fairly mixed and included yet another guidance cut. But there were also some early green shoots of genuinely encouraging progress.

For example, December saw a 3% bump in like-for-like growth. That may not seem groundbreaking, but it’s the first meaningful positive organic growth figure seen in over a year. And even better, this momentum continued into January, suggesting it might not just be a fluke driven by the holiday season.

As for the downgraded outlook, while frustrating, it’s worth highlighting that this comes as a result of management hitting the reset button by accelerating stock clearance and rebuilding its value credentials in the eyes of customers.

All in all, the new management team have seemingly laid the foundations of a multi-year recovery. And providing there are no hidden cracks, B&M shares could continue to beat the market in 2026 and beyond.

What to watch

Even with some encouraging early progress, there’s still a long road ahead.

Cutting prices to recapture lost market share appears to be a prudent move. But being forced to do it at a time when minimum wage hikes are driving up labour costs is far less than ideal, squeezing profit margins from two directions at once.

This earnings pressure is only compounded by the £2.5bn of outstanding debts & equivalents on the balance sheet. And while the bulk of its loans don’t mature until 2028 to 2030, the clock is nonetheless ticking for management to restore free cash flows.

Given these risks, I want to see a bit more progress before snapping up any shares. But if management continues to deliver and the P/E ratio remains in dirt-cheap territory, it’ll likely be hard not to be tempted.

The post £5,000 invested in B&M shares at the start of 2026 is now worth… appeared first on The Twelfth Magpie.

The story’s been quite different for buy-to-let real estate investors. With continuous tax hikes placed on landlords (that don’t have the protection of an ISA tax wrapper), it’s becoming increasingly harder to turn a profit.

That’s why, for investors looking to build up wealth from scratch at 40, I think investing in cheap UK shares is a far more viable and profitable strategy.

But how much money could an ISA make?

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.

A quick profit forecast

By putting aside £500 each month to invest in quality UK stocks, index investors have historically averaged a long-term return close to 8%. And assuming the market maintains this average pace, that means over the course of 25 years, a £500 monthly investment would grow into a £475,500 pension pot.

That’s pretty nice. But rather than relying on a cheap-and-cheerful index fund, investors can craft a custom portfolio that focuses exclusively on terrific companies trading at discounted prices.

There’s no denying that this strategy requires significantly more discipline. But it also opens the door to market-beating returns. And even if that means earning just an extra 2% a year, over 25 years, that compounds into £663,417 – a near-£190,000 increase in long-term wealth.

So now the question becomes, how do you find the best cheap UK shares to buy?

Spotting bargains

One of the most popular methods for finding potential bargains is to filter stocks using the price-to-earnings (P/E) ratio. While it varies between industries, most UK shares typically sit below a P/E ratio of 12-15. And right now, applying this filter to the wider FTSE 350 reveals B&M European Value Retail (LSE:BME) as a potential bargain at a P/E of just 7.7.

So should investors rush to buy?

A discounted discount retailer

Through a combination of strategic mistakes, inventory mismanagement, and a surprise accounting scandal, B&M shares have been thrown into the gutter. The result has been a painful multi-year decline that’s wiped out almost 70% of the firm’s market-cap since the start of 2024.

However, with a new CEO at the helm, could that be about to change?

The company is now executing its ‘Back to B&M Basics‘ turnaround strategy, which is starting to bring shoppers back through its doors. But recapturing lost market share to other discounters isn’t going to be easy, especially with wage inflation driving up operating costs.

The group’s now also flirting with the idea of launching its first-ever online shopping platform, expanding into new digital channels for the first time. But this too comes with significant execution risk.

So what’s the verdict? B&M’s cheap valuation is a reflection of the uncertainty surrounding this business. Right now, I think the best course of action is to maybe wait and see.

If more encouraging results emerge signalling the start of a cyclical reset, then it might be wise for investors to think about doing a little discounted shopping.

The post No savings at 40? Ignore buy-to-let and invest in cheap UK shares appeared first on The Twelfth Magpie.