The outlook for the world economy remains fraught with peril as the Covid-19 crisis drags on. This means that investor appetite for UK stocks remains pretty fragile. The FTSE 100 for example has edged only fractionally higher during February. And it’s possible that this weakness could stretch into March as rising concerns over soaring inflation also damage market confidence.
I don’t think that all UK shares will struggle to rise next month, however. I have no intention of stopping buying British stocks for my Stocks and Shares ISA any time soon. This is because there are still plenty of quality companies which are thriving despite the economic downturn.
These particular two shares have continued to trade strongly despite the recent pandemic. And I reckon they could enjoy strong price rises in the days and weeks ahead.
Should you invest £1,000 in Hotel Chocolat right now?
When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Hotel Chocolat made the list?
A top UK tech share
Companies are investing more and more money on protecting their IT operations from cyberattacks. I think this makes Kape Technologies (LSE: KAPE) a brilliant UK share to buy right now. In fact I’d buy it for my ISA before full-year financials come out on 17 March.
A string of upbeat financial statements has lifted the IT giant’s share price 16% higher over the past 12 months. In its January update it said it had been “substantially growing its customer footprint” in 2020 and that, as a consequence it expected revenues to have jumped 85% from 2019 levels. I believe sales should continue to march higher too as the popularity of both homeworking and e-commerce goes from strength to strength.
The obvious threat to Kape Technologies is that hackers and cybercriminals are always working to bring down security systems. And numerous or high-profile failures by the UK share’s systems could significantly dent future business wins in the future. In the meantime the company is expected to record a 2% earnings rise in 2021. This leaves it trading on a price-to-earnings (P/E) ratio of 21 times.
High growth, cheap valuation
The Mpac Technologies (LSE: MPAC) share price has also rocketed recently. In fact it’s up 90% during the past year. And I believe the release of full-year financials (also on 17 March) could be the catalyst for further gains.
This UK stock provides high-speed packaging and automation systems to businesses. It’s therefore benefitting from the rising investment companies are making in robotics to improve efficiency. It’s why Mpac claimed last month that “we continue to win original equipment and service orders with robust demand” in spite of the impact of Covid-19 on the global economy.
Now Mpac is smaller than many of its rivals. This, combined with the threat of further industry consolidation, could weigh on margins down the line. But I still think the automation company is still an attractive stock at current prices. City analysts reckon earnings here will soar 25% in 2021. This leaves it trading on a low forward price-to-earnings growth (PEG) reading of 0.7.
