5 cheap UK shares I’d buy for a new Stocks and Shares ISA

I already have a Stocks and Shares ISA, and it’s based on long-term FTSE 100 dividend shares. That’s the core of my investing strategy. But with the new ISA allowance, I’m thinking I might branch out a bit, and I’ve been looking for cheap UK shares.

My first potential pick is cybersecurity technology expert Darktrace. Is it cheap? Looking at the big slide since 2021’s peak levels, it just might be.

At 407p, the Darktrace share price has lost 60% of its peak value. It is still up around 24% since flotation in April 2021, but it looks like the early IPO bubble might be history.

There’s obvious risk with new technology, and Darktrace has no profits yet. But I am tempted to add it to my Stocks and Shares ISA.

The best recovery pick?

I have almost bought Rolls-Royce shares many times. With its poor recent run, I’m glad I haven’t. But now I can’t help seeing a fresh buying opportunity. I steer clear of recovery stocks until I see the recovery starting, and I believe we could be getting close.

There’s a risk of a further downturn as our economic outlook is gloomy. And I usually don’t invest in companies with high debt. But if I’m focusing on cheap UK shares this year, it could be time to buy.

Blockchain technology

I wonder if crypto miner Argo Blockchain might be ready for a second growth phase? The shares are down 70% in 12 months. But, over two years, there’s still a 1,700% gain.

The company has faced criticism over its costs, specifically regarding its new mining facility. And it has been hit by short sellers. But against that, Argo’s resources will surely be in demand for any blockchain work, wherever Bitcoin itself goes, won’t it?

I expect volatility and a significant risk of loss. So maybe just a small investment.

Stocks and Shares ISA diversification

Bankers Investment Trust is my next potential Stocks and Shares ISA pick. Bankers has raised its dividend for 55 straight years, which is a big plus.

I also want to expand my ISA globally. Bankers’ biggest holdings are American, but it avoids the high-risk stocks that are often overvalued. So it could get me global exposure from a cheap UK share.

But is it good value? The shares are discounted 7% to net asset value, so I think it is — even if it does expose me to geopolitical risk.

Another cheap UK share?

I don’t think I could go a whole Stocks & Shares ISA year without buying a financial stock. My current top selection is Direct Line Insurance Group.

Although Direct Line’s earnings have taken a dip during the pandemic squeeze, it is still paying big dividends, reaching 8% in 2021. But are they under threat? Well, I see the economic outlook as double-edged. High inflation and possible recession could hit financial sector prospects. But the longer-term post-pandemic outlook could be a lot brighter.

I wouldn’t invest a whole £20,000 Stocks and Shares ISA allowance in these potentially cheap UK shares. But I could see myself allocating £1,000 to each of the five over the coming year.