So which bargain stocks have grabbed my attention today? Grainger (LSE:GRI) and Ibstock (LSE:IBST) have both caught my eye, as each carries one or more of a low:

• Price-to-earnings (P/E) ratio
• Price-to-earnings growth (PEG) ratio
• Price-to-book (P/B) ratio

As a keen income investor, I’ve also considered the dividend yields of each company. And one of these top stocks carries a yield miles above the FTSE 250 average of 3.3%. Let’s take a look.

Too cheap to miss?

Grainger’s share price has fallen off a cliff since the Middle East conflict began. Why? With soaring oil prices fuelling inflation, it’s possible that interest rates will be hiked, hitting the property stock’s asset values and earnings.

But have these fears been overstated? I think so, given how cheap Grainger’s shares are today. Its forward price-to-earnings (P/E) ratio has tumbled to 5.8 and its P/E-to-growth (PEG) to 0.7.

As well, the real estate investment trust (REIT) has seen its P/B ratio drop to 0.6. As with the PEG, any reading below 1 indicates a share trading below value.

Finally, Grainger’s dividend yield has jumped to 5.9%. Under REIT rules, at least 90% of annual rental profits must be paid out in dividends.

On balance, I think Grainger’s a top stock to consider in uncertain times. And especially with that rock-bottom valuation. Its focus on the stable residential property market should help it weather any storms. We all need a roof above our head, after all.

Looking longer term, Grainger has exceptional earnings potential as it steadily builds its portfolio. The company has more than 11,000 homes today, and a large development pipeline to raise that number by almost half. I think it could soar in value over time.

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.

Another FTSE 250 bargain

Brick manufacturer Ibstock is possibly even more affected by the Iran war than Grainger. How so?

Rising interest rates threaten to derail the housing market’s fragile economy. On top of this, brickmaking is a highly energy-intensive process, leaving this FTSE 250 share vulnerable to rocketing energy prices.

Could these threats now be baked into Ibstock’s share price, though? I think so. In fact, I’m considering adding more of its shares to my existing holdings, so cheap are its shares right now.

Ibstock’s forward PEG ratio is just a fraction above 0, suggesting outstanding value. Its P/B is also under the value yardstick of 1, at 0.9.

As an investor, I’m happy to endure some short-term pain in exchange for significant long-term gain. And the potential returns I expect to make here are hugely attractive. Brick demand could accelerate sharply as Britain’s rising population fuels a housebuilding boom. Government studies suggest as many as 300,000 new homes are needed every year following years of undersupply.

Ibstock is especially well placed to capitalise on this opportunity. It’s the UK’s largest brickmaker, accounting for roughly 40% of market supply.

The post These white-hot FTSE 250 growth shares are on sale today! appeared first on The Twelfth Magpie.

Some of these drops can be understood, but plenty of UK shares have also fallen beyond what is warranted. I’ve sought to find some of these cheap stocks and explain why now could be a great time to invest.

In some cases, I didn’t have to look very far. Here are three FTSE 250 shares I own that look dirt cheap right now.

Softcat

Tough market conditions have seen Softcat (LSE:SCT) shares dropped sharply since last summer. As a consequence, its forward price-to-earnings (P/E) ratio has tumbled to 19.6 times.

That might not look low on paper. But compared to the European IT sector’s average of 34 to 35, it suggests a possible bargain to be had.

Things are more difficult than usual as companies pause tech spending. However, Softcat continues to deliver impressive growth — profits rose by double-digits for the twentieth straight year in the 12 months to June. The firm’s expertise across multiple fast-growing tech trends suggests to me it should continue outperforming. It’s why I opened a position in the company this month.

City analysts largely think this reflects an attractive buying opportunity. Of the 13 who rate the stock, nine give it a Strong Buy. Three consider it a Hold. One has slapped a Strong Sell on Softcat.

Ibstock

Ibstock (LSE:IBST) is the UK’s largest brick manufacturer by volume. And it’s fallen sharply as hopes over a sustained improvement in housebuilding have dwindled.

But has the market overreacted? I think so. Key housing data has picked up since the start of 2026, and with interest rates falling the market could accelerate. Looking beyond this year, the brickmaker should benefit as planning red tape is slashed to boost build rates.

Brokers aren’t exactly bowled over by Ibstock’s investing case today. Four of the 10 who rate the company consider it a Buy. The remainder think it’s a Hold.

However, at current prices it’s worth serious attention, in my view. The FTSE 250 firm’s P/E-to-growth (PEG) ratio is 0.5. Any reading below one suggests a share trading below value.

Spire Healthcare

Spire Healthcare (LSE:SPI) is one of the largest private hospital groups in the UK. Its shares slumped in December as it warned of lower NHS-related work due to government budget restrictions.

Yet it’s started to rebound in 2026, and I’m confident it will recover even if a touted takeover fails to materialise. Demand from self-pay patients is still rising strongly, and should carry on as long NHS waiting lists endure, pulling profits (and Spire’s share price) higher.

Analysts are unanimous in their positive view of the company today. Six currently have ratings on the business. Five consider it a Strong Buy, with the other slapping a standard Buy on the healthcare giant.

For 2026, Spire trades on a PEG ratio of 0.4.

Final word

I’m not saying investors won’t be able to pick these UK stocks up more cheaply in the future. However, each offers brilliant value for money at current prices as I’ve shown. And so they demand serious consideration from savvy investors.

The post A once-in-a-decade chance to buy these 3 UK stocks on the cheap? appeared first on The Twelfth Magpie.

This underperformance reflects a bleak outlook for the UK economy, along with increasing pessimism over interest rate cuts as inflation rises. Roughly 40%-45% of the FTSE 250‘s earnings come from Britain, far higher than the internationally flavoured Footsie.

Some of the index’s top quality constituents have actually fallen sharply since 1 January, which I believe represents a potential dip-buying opportunity. Here are two such stocks I think demand serious consideration today.

Bloomsbury Publishing

Bloomsbury Publishing‘s (LSE:BMY) shares have dived 29% in the year to date. While its Harry Potter franchise remains as popular as ever, weakness in other parts of the business has pulled the book producer sharply lower.

More specifically, poor sales at its academic publishing division have taken the shine off the firm’s other operations. Organic sales here dropped 10% in the last financial year, it announced in May, due in part to budgetary pressures in the UK and US. The company’s failed to recover ground since then.

While these troubles may persist, I think there’s a lot to like at Bloomsbury that makes it worth a close look. The long-term outlook for its academic publishing unit remians robust, helped by its gamechanging acquisition of high-margin operator Rowan & Littlefield.

But what really draws me in is the quality of its consumer division, and more specifically its pedigree in the fast-growing fantasy and sci-fi fiction markets. Harry Potter isn’t the only star series in its portfolio — Sarah J Maas’s A Court of Thorns and Roses is another one of its bestselling series, with 75m sales and more books contracted to come down the pipeline.

City analysts are united in their view that Bloomsbury shares will rebound over the next 12 months. The consensus view is for a 64% rise from current levels, to 783p per share.

Ibstock

Ibstock‘s (LSE:IBST) share price has dropped 21% since 1 January. It’s fallen on fears that the recent housing market recovery could be flagging as the UK economy struggles and inflation rises.

For long-term investors, however, I think the brick manufacturer’s investment case remains a robust one. It’s why I hold the company in my own Stocks and Shares ISA.

Despite high competition, the demands of a growing population could supercharge product sales over the next decade. The government plans to build 3m new homes to 2029 alone. Wisely, Ibstock’s invested heavily in capacity to meet future demand.

But that’s not all that’s attracted me, as I think the company can also expect robust off-take from the repair, maintenance and improvement (RMI) sector. The UK housing stock is one of the oldest in the world, so there should be steady demand here for years to come.

As with Bloomsbury, City brokers are united in their belief Ibstock shares will rebound over the next year. The average share price target among them is 189.4p, representing a 36% premium from today’s levels.

The post 2 out-of-favour FTSE 250 stocks to consider this October appeared first on The Twelfth Magpie.

Purchasing growth-focused shares at a discount can provide a buffer against price volatility. Paying less for a company’s shares provides a margin of safety against future drops. It also provides attractive entry points for dip buyers — this can provide support and fuel a rebound when investor sentiment improves.

With this in mind, here are two cut-price UK shares for investors to consider in September.

Building back stronger

Brickmaker Ibstock‘s (LSE:IBST) share price has tumbled a sizeable 27% over the last 12 months. For long-term investors, I think this represents an attractive dip-buying opportunity.

Building materials suppliers remain at the mercy of inflationary pressures than can impact interest rates and homebuyer affordability. But I’m optimistic the recent sales recovery Ibstock has enjoyed can continue as inflation tracks broadly lower — latest financials showed its sales up 12% in January-June as housebuilding improved.

I certainly feel Ibstock can grow strongly over the long term as Britain’s population rapidly grows and home construction picks up across the country.

Even after its share price drop this year, the FTSE 250 company — at first glance at least — doesn’t appear all that cheap. Its forward price-to-earnings (P/E) ratio is 18.6 times for 2025.

But dig a little deeper and Ibstock shares look much more appealing from a value angle. City analysts expect earnings to rebound 56% in 2026 as market conditions improve, pushing its P/E ratio much lower to 11.9 times.

This also means the firm’s price-to-earnings growth (PEG) ratio is just 0.1. Any reading below one suggests a share is undervalued relative to expected profits.

Go for gold

Gold stocks like Pan African Resources (LSE:PAF) can be perfect shares to buy in difficult or uncertain times.

They still carry risk given the unpredictable nature of metals mining. However, the potential for supersized gains can offset these risks for many investors. Pan African has risen 137% in value over the past year.

By comparison, the gold price itself has risen a still-impressive-but-lower 43%. Fixed costs can mean miners’ profits can take off when revenues rise, leading to breakneck returns during gold bull markets.

City analysts expect Pan African’s earnings to surge 73% in the current financial year (to June 2026). This reflects the robust outlook for bullion prices and expected production ramp-ups — group output is tipped at 275,000 to 292,000 ounces this year, up from the 197,000 ounces expected in financial 2025.

Remember though, there are no guarantees the company will hit this target. Last year’s lower-than-predicted output underlines the uncertainty that I described earlier.

Yet with a forward P/E ratio of 5.3 times, I think Pan African shares enjoy a degree of protection from wild price swings if operational issues emerge. In fact, with the company also trading on a sub-1 PEG of 0.1, I think there’s scope for substantial price appreciation if it hits targets and gold prices stay robust.

The post 2 dirt cheap UK growth stocks to consider in September! appeared first on The Twelfth Magpie.

There are a couple of stocks from the FTSE 100 and the FTSE 250 that currently trade at P/E ratios above 30. But – for different reasons – I think both are worth considering.

Informa: a corporate cash machine

Informa‘s (LSE:INF) in the business of running trade shows and conferences. Its biggest competitive strength is the popularity of its events, which are leaders in their various industries.

The firm also leases – rather than owns – the venues that host its events. As a result, it has relatively little in the way of physical assets, which makes for low maintenance costs. 

A consequence of this is that Informa’s free cash flow is consistently higher than its net income. In 2024, net income was around £407m, while free cash flow was £771m.

The company’s cash flow statement indicates that a lot of the difference is due to amortisation costs. Some of these relate to the firm’s acquisition of Ascential in 2024.

There are some important risks to consider. One of the most obvious is the possibility of a trade war, which is especially live at the moment and could be significant.

Importantly though, I don’t think the stock’s as expensive as its P/E multiple suggests. On a free cash flow basis, it trades at a multiple of 13 and this seems much more reasonable.

Ibstock: in a cyclical decline

Shares in FTSE 250 brick manufacturer Ibstock (LSE:IBST) currently trade at a P/E ratio of almost 50. But there’s a very clear reason for this. 

According to the Office for National Statistics (ONS) the number of housing completions has been falling since 2021. And that has been weighing on demand for bricks. 

There’s reason to believe though, that the long-term picture’s much more positive. The UK has a shortage of housing that might well lead to strong demand over the next decade and beyond. 

If this causes Ibstock’s earnings to get back to where they were at their peak, the current share price implies a P/E ratio of around 8. I think that means the stock might not be as expensive as it looks.

Ongoing developments in housing construction are a potential risk for the firm. Some new building techniques require fewer bricks than traditional ones and this is worth paying attention to. 

Investors therefore shouldn’t be complacent when it comes to the stock. But they also shouldn’t take a high P/E ratio at face value as a sign the company’s shares are overvalued.

Buying at high multiples

Valuing a stock isn’t just about looking at the multiples it trades at. A high P/E ratio says more about investor expectations than the underlying business.  

With Informa, the business generates more cash than its net income indicates. And Ibstock’s profits should gather momentum in the event of UK housebuilding picking up in the future. 

I don’t think investors would be mad to consider buying either at today’s prices. I see both as reasons to look past the headline multiples when it comes to evaluating stocks.

The post Would investors be mad to consider these UK shares at P/E ratios above 30? appeared first on The Twelfth Magpie.

Many UK investors fail to appreciate the advantages of this cost-effective investment vehicle, with a £20,000 annual tax-free allowance. Especially as the government proposes policy changes that could have dire consequences for long-term investors.

Let’s take a look at what’s happening.

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.

ISA changes: an opportunity disguised as reform?

UK policymakers are considering a revamp of the ISA system, including reducing the allowance for Cash ISAs to £4,000 — or at least that what some newspaper have reported. This is likely an attempt to make investment-based ISAs seem more attractive. While the idea has drawn criticism — with some suggesting it could confuse or even alienate savers — the underlying message is clear: the government wants more capital flowing into UK shares.

Overall, I think that’s good for the market, even if it pressures those unfamiliar with investments.

And as pension funds increasingly ignore the public market, Stocks and Shares ISAs may become one of the few remaining ways to support UK-listed companies. Sure, institutional outflows may depress valuations in the short term — but they also give retail investors more opportunities to capitalise on.

Cheap valuations, rich opportunities

Despite the Footsie’s recent recovery, UK shares overall continue to trade at a discount to their US and European peers. Many fundamentally sound businesses remain overlooked, with low price-to-earnings (P/E) ratios and generous dividends.

Take Ibstock (LSE: IBST), for example. The 126-year-old brickmaker is facing short-term pressures due to a sluggish housing market, but its long-term fundamentals remain solid. It operates in a sector that’s core to national infrastructure and with housing demand far outstripping supply, the need for building materials isn’t going away.

Despite a bumpy 2024, analysts expect earnings to rebound sharply in the next two years. Net sales are forecast to rise 9.5% a year going forward, with EBITDA expected to reach £125.8m by 2027 — a £33.6m increase.

Of course, its performance is closely tied to the cyclical UK housing market, so it’s vulnerable to economic downturns and rising interest rates. Not to mention the rising cost of energy and raw materials — all of which could hurt profits and threaten dividends.

Still, it boasts a healthy balance sheet with a forward dividend yield of over 5% and a strong position in the UK’s decarbonising construction sector. At current levels, I think the stock looks undervalued. For ISA investors seeking both income and long-term price growth, it could make a decent addition to consider for a diversified portfolio.

The case for long-term optimism

The UK market still struggles with high-profile companies choosing to list in New York rather than London, and trading volumes for mid-cap names have declined. But that negativity may now be priced in — or even overdone.

With reforms on the table, attractive valuations and fresh investor interest in ISAs, the building blocks for a recovery are taking shape. The FTSE’s recent record highs are, in my opinion, just the beginning. For investors thinking long term, a Stocks and Shares ISA could be the best way to reduce tax while supporting Britain’s share market revival.

The post UK market revival: amid policy shifts, a Stocks and Shares ISA could empower retail investors appeared first on The Twelfth Magpie.

Both trade on rock-bottom price-to-earnings (P/E) ratios and/or modest price-to-earnings growth (PEG) multiples. Value investors should give them serious consideration right now.

Springfield Properties

The FTSE 100 is the most popular places to go for investors seeking housebuilder shares. I own a handful of the index’s heavyweights (Barratt Redrow, Persimmon and Taylor Wimpey, if you’re wondering).

But today, my gaze has been drawn to AIM housebuilder Springfield Properties (LSE:SPR). This is because of the exceptional value it currently offers.

City analysts think annual earnings will leap 80% this fiscal year (to May). Consequently, it trades on a forward P/E ratio of 7.5 times. On top of this, Springfield’s corresponding price-to-earnings growth (PEG) ratio is just 0.1. Any reading below 1 suggests a share is undervalued relative to expected profits.

However, the cheapness of Springfield’s shares reflects ongoing uncertainty in the housing market. With the UK economy struggling and Stamp Duty rising for first-time buyers, worries over the industry’s resilience continue to swirl.

While nothing’s guaranteed, I’m optimistic the housing market will remain pretty solid, underpinned by further likely interest rate cuts in the coming months. My confidence is shared by Nationwide’s chief economist Robert Gardner.

Despite noting that average prices dropped 0.6% month on month in April, Gardner predicts: “Activity is likely to pick up steadily as summer progresses, despite wider economic uncertainties in the global economy, since underlying conditions for potential home buyers in the UK remain supportive.”

Although Springfield saw revenues fall 13% in the first half, it said in February that its private housing reservation rate is “experiencing signs of increased confidence following interest rate cuts“.

With extra rate cuts tipped for the coming months, I expect trading to keep improving.

Ibstock

Solid support for the housing sector also bodes well for FTSE 250 brick manufacturer Ibstock (LSE:IBST). This is another UK share I own in my portfolio. And I’m considering increasing my holdings given its excellent value for money.

For 2025, City analysts expect annual earnings to jump 25%. This leaves it trading on a sub-1 PEG ratio of 0.8.

Amid the broader housing market improvement, Ibstock’s also enjoyed a trading uptick in recent months. It said in April that “trading conditions improved in the first quarter compared to the prior year period, reflecting increased demand in new build residential construction markets“.

Again, trading conditions here are sensitive to interest rate movements. But I’m hopeful low brick demand may have bottomed out.

Like Springfield, I believe the company has considerable long-term investment potential as the UK’s growing population drives newbuild demand. This is underlined by the government’s pledge to build 1.5m new homes in the five years to 2029.

Despite near-term threats, and the drag of high energy costs on its operations, I think the brickmaker’s another top stock to consider.

The post 2 UK share bargains to consider for an ISA in May! appeared first on The Twelfth Magpie.

It’s gloomy out there, as worries about economic stagnation and reignited inflation gather pace. I wouldn’t be surprised if share indexes keep falling in the near term.

Yet I’m not planning to stop buying UK shares, trusts, and funds for my portfolio. In fact, I’m keeping my eye out for bargains as spooked investors sell up. Purchasing quality shares at knock-down prices today can supercharge my returns when the market eventually recovers.

Here are two from the FTSE 250 that I’m currently considering buying for my Stocks and Shares ISA.

TBC Bank

TBC Bank (LSE:TBCG) — like any financial services company — is vulnerable to a sharp slowdown in the global economy. But I believe this is more than reflected in the rock-bottom valuation of its shares.

For 2025, it trades on a price-to-earnings (P/E) ratio of 5.5 times. And its P/E-to-growth (PEG) ratio is 0.3, created by City predictions of a 20% bottom-line rise. Any reading below one indicates that a share is undervalued.

Meanwhile, TBC’s forward dividend yield is 6.4%, adding a sweetenener for value investors.

This FTSE 250 share offers banking services in Eurasia. It generates the lion’s share from Georgia, and following recent expansion also has operations in Uzbekistan.

Financial product penetration in these territories is low. And with both economies growing strongly, demand for banking services is similarly soaring.

TBC’s loan book and deposits grew 14.2% and 8.1% respectively in 2024 (at constant currencies). As a consequence, net profit rose 14.7% year on year to 1.3bn Georgian lari.

Given its huge addressable markets — and the strong progress it’s making to digitalise its operations — I think TBC could be one of the best bank shares to consider today.

Ibstock

I already own Ibstock (LSE:IBST) shares on my portfolio. And I’m considering upping my stake given how cheap it looks relative to predicted earnings growth.

The brickmaker is tipped to enjoy earnings growth of 27% in 2025. This leaves it trading on a forward PEG ratio of 0.6.

Though they’ve perked up in recent days, Ibstock shares are down heavily over the last four months. This reflects fears that interest rates may not fall as sharply as hoped, denting homebuyer affordability and consequently construction rates.

While this is a substantial risk, I think that — on balance — the outlook is pretty bright for the FTSE 250 company. It said last week that sales volumes so far in 2025 were up year on year, and predicted “momentum building through the year.”

This perhaps isn’t surprising given the resilience of the housing market. Fresh financials from Persimmon on Tuesday (11 March) showed net private weekly sales per outlet up 14% in the first nine weeks of the year.

While interest rate risks remain, I’m expecting conditions to remain supportive in Ibstock’s end markets as inflation moves broadly lower.

The post Looking for ISA bargains? 2 FTSE 250 shares that are too cheap for me to ignore appeared first on The Twelfth Magpie.

One way investors can diversify is by buying a selection of value, growth and dividend shares. The first two categories can provide significant capital appreciation over time. The final one can provide a stable income over longer periods that can be reinvested to amplify compound gains.

With this in mind, here are three top FTSE 250 shares for new ISA investors to consider today.

Value

A rapid rise in weapons spending bodes well for defence businesses like Babcock International Group. But unlike fellow industry heavyweights such as BAE Systems, this particular share still looks dirt cheap, on paper.

For this financial year ending March, Babcock trades on a price-to-earnings (P/E) ratio of 11 times. This makes it one of the cheapest defence stocks currently listed on the London Stock Exchange.

On top of this, the firm’s price-to-earnings growth (PEG) ratio’s just 0.3 for this fiscal period. This is below the widely accepted value benchmark of 1 and below.

Babcock, which provides engineering and training services to armed forces in the UK and overseas, saw revenues soar 11% year on year In the six months to September.

Supply chain issues remain a threat to this defence stock. But I think this is more than baked into Babcock’s rock-bottom valuation.

Growth

Building materials suppliers aren’t out of the woods just yet. Brickmaker Ibstock (LSE:IBST) remains vulnerable to the Bank of England keeping interest rates in or around current higher-than-normal levels, denting the housing market recovery.

However, I’m optimistic the FTSE 250 company can cast off its troubles of recent years. Home sales data”s strengthening and may continue to if (as expected) rates are cut and competition among mortgage providers heats up.

In this landscape, construction could rise substantially from recent levels. Several major UK housebuilders have already pledged to kickstart building activity from 2025 onwards. This is why City analysts expect Ibstock’s earnings to soar 37% and 34% in 2025 and 2026 respectively.

Given the advanced age of Britain’s housing stock, the firm can also expect robust demand from the repair, maintenance and improvement (RMI) sector.

Dividends

The FTSE 250’s packed with great real estate investment trusts (REIT) to buy. These firms are designed for income investors, as sector rules state at least 90% of rental profits must be distributed in the form of dividends.

Supermarket Income REIT‘s (LSE:SUPR) one of my current favourites. And it isn’t just because its dividend yield of 9.2% for this financial year (to June) is a sector high.

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.

It’s also because the company’s consistently raised dividends in spite of weak economic growth and inflationary pressures in the UK. This reflects the trust’s focus on the ultra-defensive food retail market, allied with its blue-chip tenant list that includes FTSE 100 grocers Tesco and Sainsbury’s.

Supermarket Income’s share price may struggle to grow if interest rates remain around current levels. But the prospect of more large and dependable dividends still makes it worth considering, in my book.

The post 3 FTSE 250 shares to consider for a brand new Stocks & Shares ISA! appeared first on The Twelfth Magpie.

Despite this, I think there’s a big risk that means investors should be wary of these stocks. And in my view, there’s a better way to profit from a potential boost to the housing sector.

Reasons to consider housebuilders

The long-term outlook for UK housebuilders seems positive, with the gap between supply and demand unlikely to close any time soon. And there are also positive signs for the near future.

Key obstacles appear to be moving out of the way, both in terms of supply and demand. On the demand side, mortgage approvals recently reached their highest levels for 14 months. 

Chancellor Angela Rayner has also reiterated the government’s intention to remove planning obstacles for new projects. This should mean housebuilders are able to produce greater volumes.

Combined with high dividend yields and low price-to-earnings (P/E) ratios, all of this looks like a strong reason to consider buying shares in UK housebuilders. But things aren’t that simple. 

The big risk

All of the UK’s major housebuilders have been named in an investigation by the Competition and Markets Authority (CMA). The subject of the investigation is potential collusion.

I have no idea what the CMA might find, or what the outcome might be. But I think ignoring it entirely or assuming it won’t be a problem is a very bad idea. 

The investigation into car loans for Lloyds Banking Group has been known about for some time. But investors who overlooked that were in for a shock when the stock fell 14% as a result.

Will something similar happen to the housebuilders in 2025? I think it’s impossible to know, but that means these stocks can’t be valued accurately and I therefore can’t invest in them.

A better opportunity

The prospects for the UK housebuilding industry might well be bright. But shares in a brick manufacturer – such as Ibstock (LSE:IBST) – are perhaps more appealing and I think this is one worth investors considering.

Like the housebuilders, Ibstock operates in an industry with a supply deficit. There’s a shortage of bricks produced in the UK, which means they have to be imported.

Bricks are heavy though, which makes them expensive to ship. And that gives local suppliers a big cost advantage over international competitors. 

Ibstock isn’t the only UK brick manufacturer in the UK. But its scale and the strength of its balance sheet give it an important advantage over the competition. 

Investing in the UK housing industry

Ibstock isn’t without risk – the threat of new building techniques reducing the need for bricks is something investors should consider. But I prefer this risk to an unspecified potential fine.

If the CMA investigation comes to nothing and the share prices of the UK housebuilders don’t move, my view would change. But for now, I’m staying well away from the sector.

The post Here’s why I’m avoiding shares in UK housebuilders like the plague appeared first on The Twelfth Magpie.