Best Cheap UK Stocks Under £20 with High Upside (April 2025)

Here on the Investing.com Academy, we believe in full transparency, setting us apart from many ‘black box’ providers that make investment suggestions but leave investors guessing how their criteria works.

By openly sharing our methodology, we want to empower our readers with the knowledge and confidence to understand why each stock made the list, ensuring that our recommendations align with their investment goals and risk tolerance. Our selection process combines three primary filters  to identify the most promising stocks under £20 with high upside potential.

Our focus is on identifying cheap stocks trading under £20.

We considered only stocks presenting a Fair Value upside potential of at least 20%, based on the InvestingPro fair value assessment. We place considerable weight on this metric in order to steer clear of overpriced stocks and pinpoint the shares with substantial upside potential.

We prioritised UK-listed stocks for this screener.

The primary goal with these screener options is to pursue investments that combine current value and growth potential.

• Market Cap: £320.9M
• Fair Value Average: £7.71
• Fair Value Upside: 46.8%

Literacy Capital plc is a venture capital and private equity firm specialising in early stage investments, direct private equity investments, buyout, growth capital, MBIs, M&A, mature, family owned, fund investments and co investments with private equity managers. The firm is sector agnostic, but prefers to invest in communication services, consumer discretionary, consumer staples, energy, financials, healthcare, industrials, information technology, materials, real estate and utilities. The firm prefer to invest in majority or minority stakes. Literacy Capital plc was founded in 2017 and is based in London, United Kingdom.

• Market Cap: £5.45B
• Fair Value Average: £11.45
• Fair Value Upside: 33.7%

Entain PLC operates as a sports-betting and gaming company. The company provides online and multi-channel betting under the Ladbrokes name; and also includes Coral, Eurobet, 365Scores, Gala Bingo, Foxy Bingo and many more. Entain PLC was incorporated in 2004 and is headquartered in Douglas, Isle of Man.

• Market Cap: £78.35B
• Fair Value Average: £28.45
• Fair Value Upside: 46.0%

GSK PLC, together with its subsidiaries, engages in the research, development, and manufacture of vaccines, and specialty and general medicines to prevent and treat disease in the United Kingdom, the United States, and internationally. It operates through two segments, Commercial Operations and Total R&D. The company offers shingles, meningitis, respiratory syncytial virus, flu, polio, influenza, and pandemic vaccines. It also provides medicines for HIV, oncology, respiratory/immunology, and other specialty medicine products, as well as inhaled medicines for asthma and chronic obstructive pulmonary disease, and antibiotics for infections. It has a collaboration agreement with CureVac to develop mRNA-based influenza vaccines, and with Wave Life Sciences and Elsie Biotechnologies, Inc for oligonucleotide platform development. The company was formerly known as GlaxoSmithKline plc and changed its name to GSK plc in May 2022. GSK plc was founded in 1715 and is headquartered in Brentford, the United Kingdom.

• Market Cap: £79.06M
• Fair Value Average: £6.85
• Fair Value Upside: 60.4%

Water Intelligence plc, together with its subsidiaries, provides leak detection and remediation services for potable and non-potable water in the United States, the United Kingdom, Australia, Canada, and internationally. The company operates through Franchise Royalty Income, Franchise-Related Activities, US Corporate Operated Locations, and International Corporate Operated Locations segments. It offers water leak and repair solutions. The company is involved in franchising activities, as well as operates corporate owned stores. In addition, it provides clean water and waste-water solutions for residential, commercial, and municipal customers. Water Intelligence plc was incorporated in 1974 and is based in London, the United Kingdom.

• Market Cap: £24.32M
• Fair Value Average: £1.62
• Fair Value Upside: 28.8%

Transense Technologies plc develops and supplies specialist sensor systems in the United Kingdom, North America, South America, Australia, Europe, and internationally. It operates through Translogik, SAWsense, and iTrack Royalties segments. The company offers tire inspection tools for vehicle fleet operators, tire suppliers, and service centers to digitally capture safety-critical tire inspection data and advanced sensor solutions for accurate non-contact measurement of torque, force, pressure and temperature for aerospace, electric motors and drives, industrial machinery, and high-performance automotive sectors. The company also serves the commercial truck and bus fleet; defense; robotics; off-highway vehicles; and motorsport sectors, as well as tire manufacturers and distributors, commercial vehicle centers, and fleet management software developers. Transense Technologies plc was incorporated in 1985 and is based in Bicester, the United Kingdom.

It’s possible to find the full list of stocks under £20 with a high upside easily using Investing Pro.

Visit the InvestingPro Screener tool.

Select ‘Price’ as a filter parameter on the Screener page, and set the threshold value to less than £20.

Add a filter for ‘InvestingPro Fair Value Upside’ above 20%.

Select ‘United Kingdom’ under the ‘Trading Region’ tab drop-down, and make sure to select the ‘Primary Trading Item’ option, as shown in the image below.

From here, investors can then see the full list of all companies calling in the desired screener filters’ range, shown in descending order (which can be changed to any column for further prioritisation).

Penny stocks are typically priced under £1 and are often less stable (higher daily price volatility), while cheap stocks under £20 are slightly higher in price and may have better financial stability and growth prospects. Cheap stocks are also more widely available and often more liquid than penny stocks.

Investors buy cheap stocks for several reasons:

1. Potential for High Returns: If the company grows, the stock price can increase significantly, offering high-percentage returns.
2. Affordability: These stocks allow investors to buy more full shares with a smaller amount of money.
3. Speculative Trading: Some investors (usually swing and day traders) are attracted to the higher volatility and potential for quick gains.
4. Faster Options Trading: For those interested in Options trading, obtaining 100 shares of a £20 share is far quicker than obtaining the same amount of shares for £200 each – allowing a faster route to start options trading.

Yes, some cheap stocks are listed on major exchanges like the London Stock Exchange (LSE) or the NASDAQ. However, many also trade over-the-counter (OTC) or on smaller exchanges due to their lower market capitalisation and less stringent listing requirements.

Cheap stocks can be riskier due to higher volatility and less liquidity than larger-cap stocks, but they can also offer substantial rewards. Portfolio diversification and conducting thorough research can help to mitigate risk, as can having a clear investment thesis and time horizon.

Yes, some dividend-paying stocks can be bought for £20 or less, and have upside growth potential, offering a mix of income and capital appreciation.

Yes, cheap stocks can be suitable for beginners due to their affordability, but it’s important to conduct thorough research to mitigate risks in the same way as when investing in higher-cap stocks.

You can buy cheap stocks through a stock brokerage account. Research your chosen stocks using InvestingPro, then place a buy order, and manage your investment via the brokerage platform of choice.

Avoid falling for hype, neglecting due diligence, failing to diversify, and not having an exit strategy. Emotional trading can also lead to poor investment decisions.

The holding period varies; it can range from months to several years. Assessing company performance and market conditions regularly will help determine the optimal holding period.