I think the best UK shares to buy today are those that performed well over the past 12 months. In my opinion, any business that’s managed to navigate the pandemic and come out the other side relatively unscathed is well-placed to succeed in the new normal.
Of course, this isn’t guaranteed. Some companies that have thrived over the past year may struggle going forward. Nonetheless, I think adding these shares to my portfolio in 2021 could be a good idea.
Shares to buy today
B&M European Value Retail (LSE: BME) was able to capitalise on the pandemic and attract customers into its stores. The firm benefitted from ‘essential retailer’ status, which meant it could stay open as some competitors were forced to shut.
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This was a one-off benefit for the discount retailer. So, it’s unlikely B&M will benefit from the same tailwind as we advance.
However, the group has been using its pandemic profits to grow its store estate. Thanks to this investment, analysts reckon the firm’s sales could hit £4.7bn in 2022, up from £3.8bn in 2020.
These are just projections. There’s no guarantee the firm will hit these targets. What’s more, there’s no guarantee rising sales will translate into a higher share price. The company faces multiple risks, including higher wages and purchase costs.
Still, I think B&M is a well-run business. That’s why I reckon it’s one of the best UK shares to buy today and would acquire it for my portfolio.
Industrial engineering
Industrial engineering group Renishaw (LSE: RSW) operates under the radar of most investors. The company manufactures products for the healthcare and meteorology sectors. These tend to be highly engineered products and experienced clients.
Renishaw is incredibly good at what it does, suggesting the organisation has a strong competitive advantage. Clients return to the business year after year, placing new orders and helping the company grow.
Unfortunately, growth took a step back last year. The pandemic hit profits and this factor, coupled with other issues, caused Renishaw’s net income to evaporate. The company’s biggest challenge now is the risk of a prolonged economic slowdown. This could have a significant impact on both its top and bottom line.
Still, the reason why I think this is one of the best UK shares to buy today is the fact Renishaw is already recovering from last year’s setbacks. I’d buy the stock today in anticipation of a further improvement in trading.
Technical enterprise
Diploma (LSE: DPLM) is very similar to Renishaw in the way that the company provides products and services for the business-to-business market, which consumers may not necessarily recognise. The pandemic impacted it, but profits are expected to rebound rapidly this year. Analysts have pencilled in growth of 60%.
This growth is by no means guaranteed. It’s only a projection at this point, and there’s still plenty that could go wrong for the company over the next 12 months. So, investors shouldn’t rely on this projection for investment decisions.
That said, I think these estimates show the company’s potential, and I’m comfortable with the level of risk investing based on projections entails. That’s why I’d buy the stock for my portfolio today. I believe Diploma will report strong earnings growth in 2021 and beyond as the business builds on its customer base.
