I’ve been looking for top UK shares to buy in 2021. Here are four I’d happily add to my Stocks and Shares ISA today.
#1: Things are heating up!
Plumbing and heating product provider Ferguson should be able to expect a healthy US homes market to deliver solid medium-term profits growth. Latest Commerce Department data showed housing starts rocketed 5.8% in December to a seasonally-adjusted 1.67m. This was the greatest rate of growth since 2006.
Ferguson doesn’t need to worry about the drag created by a long UK economic downturn for much longer. This is because it’s about to sell its Wolseley distribution unit in Britain by the end of January. The move will allow the UK share to focus solely on the high-growth markets of North America.
#2: Playing the e-commerce theme with UK shares
Identity and address verification specialist GB Group should look forward to sustained earnings growth as well. With online shopping going from strength to strength, its IT services are in demand like never before.
Internet fraud has taken off during Covid-19 as e-commerce volumes have headed through the roof. The latest survey from credit reporting agency TransUnion showed that a whopping 35% of respondents had been subject to fraud schemes related to Covid-19. Just under a fifth of respondents had been subject to identity theft too, an all-time high and a sweet spot for GB Group.
#3: A UK tech share
Softcat’s a computer services provider that’s doing well today. In its latest trading update this month, the IT giant said that it was “significantly ahead” of where it expected to be at this stage.
Like GB Group, Softcat is benefiting from the steady rise in cyber crime. It’s also benefiting from the increasing popularity of homeworking following the Covid-19 outbreak as demand for its cloud and infrastructure services is increasing. This UK share plans to keep significantly increasing its headcount to capitalise on these opportunities and hopefully deliver profits growth (the employee count jumped 15% in its latest financial year to July 2020).
#4: Wizzing along nicely
Now, Wizz Air Holdings isn’t a UK share that’s popular among the faint of heart. Rising Covid-19 infection rates threaten to bring ever-more-stringent lockdowns and travel bans across the globe. I believe, though, that brave investors could be rewarded handsomely by buying into the Hungarian airline.
Wizz Air has one of the strongest balance sheets in the business. And it successfully got a €500m bond off the ground last week to give it more strength to ride out the current crisis, and to ramp up activity when its European markets open up again. Low-cost carriers like this one have doubled their share of the global airline market over the past decade-and-a-half. The demise of several of its rivals due to Covid-19 will give Wizz Air in particular more space to grow its share when the pandemic passes too. There are risks, of course, but I’d buy.
