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STOCK MARKET
Cheap UK stock market worth a punt

What’s going on?
JP Morgan has declared that the UK stock market is now at a record low valuation versus US and European peers. In a recent research report the Wall Street bank advised clients that now is the time to buy British stocks.

Why is this important?

Following the Brexit vote in 2016 JP Morgan took a very dim view of the UK. The US bank believed that leaving the EU would leave the British economy in a weaker position. In the years that followed the UK stock market performance lagged the US by 50% and the Eurozone by 24%.

But after years of relative underperformance JP Morgan believes that the UK valuation, based on the price to earnings ratio, is at such a discount that it’s worth a punt.

The bank upgraded UK stocks to "overweight" from "neutral", meaning it believes these stocks should perform better in the future. 

Part of the difference in values can be explained by the types of companies that are listed in the UK. Compared to the US, the UK has far fewer high growth tech companies that command high valuations in the stock market. 

But even when accounting for these differences the UK is still at a near record cheap level. The bank also noted that the UK offers the highest dividend payments out of all regions.

Takeaway
The stamp of approval from JP Morgan is a welcome boost for listed British companies that have taken a beating over the past five years.

The bank believes that issues over energy prices and labour shortages could be easing which should boost growth prospects and present a buying opportunity for investors.
 

DELIVERY
Gopuff goes big into the UK

Yesterday grocery delivery app Gopuff launched in the UK. The American firm has rolled out across 10 cities including London, Manchester and Sheffield and plans to be in 33 locations by next summer. 

For a flat fee of £1.79 per order Gopuff can deliver thousands of products to customers in minutes.

The market for quick grocery delivery has ballooned since the start of the pandemic. Numerous shopping apps have popped up almost overnight including Gorillas, Weezy, Zapp and Getir alongside takeaway apps like Ubereats and Deliveroo. Tesco, Morrisons and Asda have all have teamed up with startups to deliver shopping in under half an hour.

Gopuff was founded in 2013 and recently raised $1bn in new funding, valuing the business at $15bn. It’s a leader in the US market where it operates in 500 cities. The company bought UK grocery apps Dija and Fancy earlier this year as a route to UK and, eventually, European expansion. Now, Gopuff is rebranding those two under its own name, and moving its services over to its main app.

The company believes that the global grocery delivery market is worth a whopping $10tr so it’s no surprise that there are so many competitors. But many of these startups are loss making so it’s likely that smaller, regional players will be bought up by larger, better funded rivals.