2023 has proved to be volatile for UK shares. However, I’m quietly confident that 2024 will have better things in store. I’m not expecting a full market recovery. But I’m hopeful some stocks will begin to find their form again. I want to buy them today and, hopefully, see some handsome returns in the years ahead.
While I wish I could predict precisely what will happen in the next 12 months, unfortunately, I can’t. However, I know for a fact that interest rates and the Bank of England’s actions will play a major role in impacting investor sentiment. We’ve seen this in recent weeks as markets have rallied off the back of the Bank keeping the base rate at 5.25%.
Looking at the FTSE 100 and FTSE 250, I see plenty of value out there. These two shares are firmly on my radar.
Should you invest £1,000 in Games Workshop right now?
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Games Workshop
One company I already own is Games Workshop (LSE: GAW). I opened a position in the miniature games manufacturer earlier this year. The plan is to increase my position in the upcoming weeks.
There are a few reasons I’m bullish on Games Workshop. It has provided stable growth for investors in recent times. In the last eight consecutive years, the business has delivered sales and profit growth.
On top of that, I’m a fan of the passive income it supplies. A yield of 4.5%, at the time of writing, tops the average of its FTSE 250 peers. The firm also only uses “truly surplus cash” to reward shareholders. Even so, I must note here that dividends are never guaranteed.
The industry it operates in has experienced large growth in recent years. While that’s produced benefits for the business, it has attracted interest from larger names. Disney has plans to enter the space. I’d expect competition to fiercen in the upcoming years.
However, the firm has a relatively loyal customer base. Furthermore, with plans to diversify, such as through its recent TV series deal with Amazon, I’m expecting the company to keep up with its exciting growth.
Safestore
Also on my radar is Safestore (LSE: SAFE). I also own a small amount of shares in the business. Going into 2024, I’m open to buying some more.
With a price-to-earnings ratio just shy of seven, the stock looks cheap. It also offers the opportunity to generate extra income, albeit at 3.5% it yields slightly lower than Games Workshop.
I like to buy shares with the plan to hold them for years. Therefore, Safestore’s plans for overseas expansion are something that attracts me. In the last year, its added development sites across numerous locations in Europe. After dominating the UK, it doesn’t seem to be slowing down.
Inflation and heightened interest rates could prove to be a stumbling block for the firm. The property market is volatile. And buying more facilities may prove to be costly.
However, this doesn’t seem to be stopping Safestore. It’s recent £400m revolving credit facility gives me confidence in the future outlook for the business. I think it could be a winner for 2024, and beyond for that matter.
