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Top stocks for 2021: a cheap UK share I’d buy in an ISA for the new bull market

Royston Wild
·3-min read
Private investor buying UK shares at home
Private investor buying UK shares at home

Are you building a list of top stocks you’d like to buy in 2021? I certainly am. I’m not put off by the prospect of another difficult year for the global economy as Covid-19 cases keep rising.

UK shares still look mighty cheap following the early 2020 stock market crash. This gives those who invest for the long term a chance to get seriously rich as this new decade rolls on.

I want to get seriously rich with UK shares. And buying after the stock market crash will seriously boost my chances of doing so. I can buy quality stocks at cheap prices today and sell them for much more money later down the line when investor confidence has picked up.

And I’m thinking of buying this brilliant FTSE 250 stock for my Stocks and Shares ISA following recent price falls.

Sign pointing towards route to becoming a millionaire.
Sign pointing towards route to becoming a millionaire.

A top UK share for ISA investors

Quite why Hochschild Mining (LSE: HOC) shares are trading so cheaply is a mystery to me. This particular UK share trades on a price-to-earnings (P/E) of 8 times. This is because earnings at the silver miner are predicted to almost double over the next 12 months.

These bullish forecasts are underpinned by expectations that full-year production will soar. The 2021 estimate stands at 360,000-372,000 gold equivalent ounces (or 31m-32m silver equivalent ounces). This is up from the 280,000-290,000 gold equivalent ounces (or 24m-25m million silver equivalent ounces) Hochschild expects to haul out the ground this year.

However, it’s possible Hochschild could endure some production troubles over the next 12 months. It was forced to temporarily shut its San Jose mine following a recent spike in Covid-19 infections. Extra case explosions could prompt more closures in the weeks and months ahead too.

However, this wouldn’t deter me from splashing my cash. The possibility of this happening is baked into this UK share’s valuation, in my opinion. Besides, the long-term production outlook for Hochschild’s world-class assets in The Americas remains mighty exciting.

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A possible millionaire maker

Predictions of a profits boom in 2021 are built on expectations that precious metals demand will remain strong. Safe-haven silver and gold will remain popular in the short-to-medium term as economic uncertainty continues. Inflationary fears will keep prices propped up long after the Covid-19 crisis has eased, as central banks will need to keep interest rates low to support the economic recovery.

Investment demand might slip as the world economy picks up during the 2020s and investor confidence improves. However, improving industrial demand for silver will help to pick up the slack. And this could go from strength to strength in the years ahead as the economic upturn clicks through the gears.

Hochschild is a UK share which could deliver terrific profits over the long haul. And it could make Stocks and Shares ISA investors like me a fortune in the process.

The post Top stocks for 2021: a cheap UK share I’d buy in an ISA for the new bull market 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.

Motley Fool UK 2020