Seeking cheap stocks? Here are 2 of the best to ponder for February
The UK stock market remains packed with top-class cheap stocks despite its strong start to 2026. Investors can find quality shares trading on rock-bottom price-to-earnings (P/E) ratios. Some also carry the sort of dividend yields that can supercharge one’s passive income.
Serabi Gold (LSE:SRB) and Central Asia Metals (LSE:CAML) are two cheap shares that have grabbed my attention. Want to know what makes them brilliant bargains to consider in February? Read on.
Golden gains
Surging bullion values have driven Serabi Gold’s share price 167% higher over a 12-month horizon. Yet the Brazilian miner still offers tremendous bang for your buck, in my view.
Its P/E ratio comes in at 4.6 times for 2026, while it’s price-to-earnings (PEG) multiple is a modest 0.1. The dividend yield is also a healthy 3.4%, beating the UK stock market average.
Production is soaring under Serabi’s plan to produce 100,000 gold ounces by 2028. It’s given the firm’s profits a significant boost as metal prices have surged.
Can gold’s bull run carry on going, though? Some feel gold could be due a correction following last year’s enormous gains. I believe, however that bullion has much further to climb. The US dollar is in freefall, dropping to four-year lows in recent days. I’m expecting it to keep weakening as uncertainty over US economic, foreign, and trade policy rolls on, making it cheaper to buy dollar-denominated bullion.
The declining US dollar this week propelled gold prices to new record peaks above $5,300 per ounce. Deutsche Bank analysts think the yellow metal could hit $6,000 in 2026, it’s said in recent days. Interestingly, they’ve also said “a $6,900 per ounce price would in fact be more in line with the past two yearsâ outperformance“.
Gold should also benefit as falling interest rates boost inflationary pressures and broader geopolitical disruption continues. Serabi’s rock-bottom valuation gives it (in my opinion) ample scope to keep climbing in this environment.
Another cheap mining stock
Central Asia Metals shares some key qualities with Serabi. Its shares have been blown higher by a surging commodity price, in this case copper. Over the last year, the miner’s risen 48% in value.
Yet, today, the company — which produces the red metal from Kazakhstan’s Kounrad mine — also still offers excellent value. Its forward P/E ratio is just 8.6 times, while the PEG comes in at 0.2.
A juicy 5.9% dividend yield sweetens the deal.
Do Central Asia Metals shares have as much money-making potential, though? It’s possible in my view. Copper prices should also benefit from the weakening US dollar. However, they could come under pressure if near-term demand indicators worsen — for instance, if China’s economy takes a fresh bump.
But with supply-related problems deepening, I believe the industrial metal could keep rising strongly. I’m certainly confident in the copper price outlook over the long term, as consumption from fast-growing sectors heats up. We’re talking about data centres, electric vehicles, and renewable energy projects, to name but a few.
The post Seeking cheap stocks? Here are 2 of the best to ponder for February appeared first on The Motley Fool UK.
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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
