3 UK shares to buy

Rupert Hargreaves takes a look at three UK shares in the early stages of recovery he’d buy for his portfolio, all with promising futures.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

I’ve been looking for UK shares to buy from my portfolio. I’ve been concentrating on companies that may benefit from the economic recovery and are already showing signs of growth. 

Here are three stocks I’d buy that meet these goals. 

UK shares to buy 

The first company on my list is retailer Marks & Spencers (LSE: MKS). In the past, I’ve stayed away from this enterprise because it always seems to the in the middle of a turnaround, but it’s never turned. It now looks as if the latest plan is starting to yield results. 

The company recently informed the market it was upgrading its profits forecast for its current financial year off the back of better-than-expected trading. This is the first time the group has outperformed expectations for over a decade. 

There’s still plenty of work for the company to do, but the fact that customers are returning faster than expected is incredibly positive. It will provide much-needed cash flow to drive the rest of the group’s recovery. It’s trying to expand its digital operation, cut costs and boost its food business. 

Challenges it may face include cost inflation, competition from online peers and potentially higher taxes. But as Marks’ recovery continues, I’d buy the stock for my portfolio of UK shares. 

Digital revolution

Three years ago, newspaper publisher Reach (LSE: RCH) appeared to be facing a bleak future. Circulation volumes were declining, and so was advertising income. 

However, the organisation has managed to turn things around by investing heavily in its online news business. Digital advertising and other e-commerce strategies have helped the company expand its top and bottom lines, and it has returned to growth. 

That said, the online news industry is incredibly competitive. Reach may have been able to reverse its revenue decline, but keeping readers interested going forward is going to be another challenge altogether. 

Still, the recent boost in profitability has allowed the group to pay down debt and reward shareholders with a dividend. It’s now on a firmer financial footing than it has been for some time. 

These are the reasons why I’d buy the company for my portfolio of UK shares. 

Green revolution 

The final company I’d buy is public transport operator National Express (LSE: NEX). Throughout the pandemic, consumers have been advised to avoid public transport. This decimated the organisation’s revenues.

As customers return, growth should return too. And there’s a more substantial tailwind working in the background. 

Public transport is going to play a crucial part in decarbonising the UK’s transportation system. This suggests demand for National Express’s services will expand in the long run. Driving is also becoming more expensive, which may push more car owners to use public transport as well. 

These are the reasons why I’d buy this recovery stock for my portfolio of UK shares, although this might not be suitable for all investors.

National Express’s recovery is still in its early stages. Another lockdown could set the group’s recovery back months. Rising fuel and wage costs may also hinder its recovery. I’ll be keeping an eye on these risks as we advance. 

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

This FTSE sell-off gives me an unmissable chance to buy cut-price UK stocks!

The last few months have been tough for UK stocks and their troubles aren't over yet, but Harvey Jones isn't…

Read more »

Investing Articles

Here’s the forecast for the Tesla share price as Trump’s policies take focus

The Tesla share price surged following Donald Trump’s election victory, but the stock is trading far above analysts’ targets. Dr…

Read more »

Investing Articles

£15,000 in cash? I’d pick growth stocks like these for life-changing passive income

Millions of us invest for passive income. Here, Dr James Fox explains his recipe for success by focusing on high-potential…

Read more »

Passive income text with pin graph chart on business table
Investing Articles

Here’s my plan for long-term passive income

On the lookout for passive income stocks to buy, Stephen Wright is turning to one of Warren Buffett’s most famous…

Read more »

artificial intelligence investing algorithms
Growth Shares

Are British stock market investors missing out on the tech revolution?

British stock market investors continue to pile into ‘old-economy’ stocks. Is this a mistake in today’s increasingly digital world?

Read more »

Fireworks display in the shape of willow at Newcastle, Co. Down , Northern Ireland at Halloween.
Investing Articles

My 2 best US growth stocks to buy in November

I’ve just bought two US growth companies on my best stocks to buy now list, and I think they’re still…

Read more »

Investing Articles

£2k in savings? Here’s how I’d invest that to target a passive income of £4,629 a year

Harvey Jones examines how investing a modest sum like £2,000 and leaving it to grow for years can generate an…

Read more »

Renewable energies concept collage
Investing Articles

Down 20%! A sinking dividend stock to buy for passive income?

This dividend stock is spending £50m buying back its own shares while they trade at a discount and also planning…

Read more »