UK shares have kick-started the yr in superior vogue. The FTSE 100 has rallied 6.9%. The FTSE 250 has additionally been getting in on the motion, climbing 6%.

However loads of UK-listed firms nonetheless seem like bargains, in my eyes. The typical Footsie price-to-earnings (P/E) ratio is simply 11. That’s far off from its historic common of between 14 and 15.

What’s in retailer?

It’s been a troublesome few years for retail merchants. The pandemic was a once-in-a-lifetime incidence that despatched inventory markets throughout the globe tumbling. The file inflation and rate of interest hikes which have adopted haven’t been way more enjoyable. However it appears we could also be lastly popping out the opposite aspect.

I’m conscious the problems above might nonetheless hinder the Footsie’s efficiency this yr. Whereas it’s extensively rumoured the primary fee lower will happen in August, ought to the Financial institution of England resolve to delay this, that may little doubt see markets react negatively. After all, I can’t neglect there’s the upcoming election to throw into the present cocktail of uncertainty too.

However whereas the UK will face challenges, trying on the valuation of many companies, I’m hopeful within the years to return we might see share price proceed to tick upwards. Loads of UK shares look severely undervalued proper now. For traders who decide shares for the long term, now might be an amazing alternative to dive in and snap up some bargains.

An incredible inventory?

One instance of a inventory I’m hoping to choose up within the close to future is Unilever (LSE: ULVR). It has put up an excellent efficiency this yr. Up to now, it’s jumped 14.6%. Even so, buying and selling with a P/E of just under 20, I nonetheless assume there’s worth in its shares. That’s under its historic common.

I’m bullish on the expansion alternatives the inventory might present. Below CEO Hein Schumacher, the agency’s making progress with its streamlining mission. Schumacher desires to construct a enterprise that may “do fewer things better”. In an try and focus extra on its core manufacturers, Unilever’s been offloading its underperforming and capital-intensive items.

It’s additionally a defensive inventory. Which means via intervals of uncertainty, it could actually deliver stability to my portfolio. There ought to at all times be demand for the important items it sells.

That stated, it does promote premium manufacturers. Which means competitors’s a risk as customers might store round for cheaper options. That’s particularly pertinent throughout a cost-of-living disaster.

However I’m nonetheless a fan at present. And with its 3.4% dividend yield, there’s the chance to generate some further money via shopping for shares. That’s certainly not the very best yield on the Footsie. However it hasn’t lower its payout for over 50 years, which is an unimaginable file.

Barclays not too long ago slapped a 5,200p price goal on the inventory. That represents an 18.7% premium to its present price. With that in thoughts, I feel June might be a wise time for traders to contemplate taking a look at low-cost UK shares.