I’ve been on the hunt for reasonable shares to purchase for my portfolio after the inventory market volatility of current months. Two that got here on my radar are literally ones I personal already, however so long as I maintain my portfolio sufficiently diversified, I’m not in opposition to constructing an even bigger stake in an organization whereas making the most of a decrease share price to take action.

Nevertheless, whereas they promote for pennies every and should look low cost, in each circumstances there are dangers that might assist clarify the low-seeming price.

Topps Tiles

My shareholding in Topps Tiles (LSE: TPT) has thus far been very disappointing. However I’ve held on.

I do acknowledge a number of the dangers that designate a share price fall of 14% previously 12 months. A weak economic system can damage demand for dwelling renovation, for instance.

Set in opposition to that, although, I anticipate that there’ll all the time be some demand for tiles, vinyls, and different such flooring and wall coverings, at each level within the financial cycle. Topps can profit from that due to economies of scale, a big buyer base, and intensive community of depots.

Interim outcomes this week confirmed group revenues up 16% 12 months on 12 months, whereas a pre-tax loss on the identical level final 12 months gave method to a £1.9m revenue earlier than tax this time round.

The interim dividend fell by a 3rd. I don’t like that, however I do recognize administration’s self-discipline in delivering on their dividend coverage. That may assist handle money prudently.

For now, I feel the share stays a possible discount however with numerous work nonetheless to do. So, except the share price falls additional, I can’t be shopping for extra for my portfolio. I’ll dangle on to my present holding.

S4 Capital

One other very disappointing funding I’ve held on to is digital advert company group S4 Capital (LSE: SFOR). Simply once I assume the share price absolutely can’t go even decrease, it does. S4 has misplaced 97% of its worth since September 2021.

However I reckon this share is presumably at an inflection level. I feel it could both drift down till it’s nugatory or else doubtlessly stage a surprising restoration.

Positive, the primary quarter noticed a 12% year-on-year decline in revenues. Promoting demand might get weaker, AI threatens to eat a lot of the business’s lunch, and S4’s tech-heavy shopper roster might nicely tighten their belts on spending. All dangerous information.

However there may be one other facet to all this. The corporate has sharply lowered internet debt and expects to decrease it additional this 12 months. It has initiated a dividend. Liquidity and money movement was “much improved” versus the identical interval final 12 months.

Boss Sir Martin Sorrell was on the ropes like this earlier than at WPP and went on to create monumental shareholder worth. However his position additionally provides key-man danger to all of the others.

Insiders personal a big chunk of the corporate and haven’t been promoting currently. Nor, although, have any dipped into their very own pockets this 12 months to purchase shares regardless of a report low price.

That alone implies that, whereas I feel this might nonetheless be an awesome discount, I can’t increase my shareholding simply but. So, I proceed to search for different low cost shares to purchase as a substitute.