Just under two months ago, the stock market tanked, marking the first bear market for more than a decade. Many top UK shares saw substantial amounts wiped from their valuations.
Since then, many stocks have staged noticeable rebounds. Regardless of whether this is the beginning of a new bull market, or there’s a further drop to come, I’d invest £1k in these top UK shares to ensure I don’t miss out on attractive returns over the long term.
Halma
Halma (LSE: HLMA) is a global group composed of life-saving technology companies. These companies specialise in making products geared towards hazard and life protection.
The group’s share price has staged an impressive bounce-back and is now only down by 5% since its mid-February high. That’s a remarkable comeback considering the price had fallen by 25% in the depths of the stock market crash.
It’s worth noting that shares in Halma don’t come cheap. The price-to-earnings ratio is relatively high at around 40. That figure may be off-putting for value investors, but I think it reflects the persistent bright growth prospects of the company.
In the Asia Pacific and North America regions, the group is benefiting financially from numerous acquisitions and has plans for more on the horizon. This will be a key driver of growth moving forward, particularly in the expanding Apac market.
In a results release towards the end of 2019, Halma reported record revenue, profits and dividends, up 12%, 14% and 7% respectively. What’s more, there was revenue growth in all four major regions and sectors. That’s an impressive set of results.
And in a mid-March trading statement, it accepted that the Covid-19 outbreak will have an impact on business. Early estimates knock £5m-£10m off forecast adjusted profits, but I wouldn’t be surprised if the true figure is much higher.
Despite this, the group’s financial position is robust, with plenty of cash and a strong balance sheet.
This should be more than enough to see the company through the current crisis, and if so, I expect attractive returns stemming from further growth inspired by an innovative business strategy. A top UK share in my eyes.
JD Sports
Sports-fashion retail giant JD Sports (LSE: JD) is a much-loved high street name. The company has shops around the world, including in Europe, the US, Asia and Australia.
The FTSE 100 constituent has experienced exponential growth in its share price over the last five years, increasing by 653% until the stock market crash. However, since the onset of the bear market, the share price has fallen by 43% in light of fears over the impact of Covid-19 on business.
Just weeks ago, the retailer closed shops across Europe. While business continues as usual on the company’s website, the impact on earnings will be palpable. The company has stated that online sales will only offer a small mitigation in terms of overall profit contribution.
However, JD’s financial performance was exceptional last year. Revenue grew by 49% and profit before tax increased by 15%. Additionally, the company’s dividend increased from 1.63p to 1.71p.
More importantly, the company confirms that it maintains a strong balance sheet, net cash resources and sufficient working capital facilities. With that in mind, I expect JD to safely come through the current crisis and continue growing into the future. In my opinion, it’s another top UK share.
