Many UK shares still trade at attractive prices despite the stock market’s recent rebound. Although they may face uncertain futures in some cases, their valuations and strategies could lead to capital growth for investors over the long run.
With that in mind, here are two companies that could be worth investing money in today. Their growth potential may not yet be priced into their share prices, which could mean they offer good value for money.
An undervalued buying opportunity among UK shares
The Next (LSE: NXT) share price has outperformed many other UK shares in the past few months. They’ve gained 15% in the last three months, as investors have become more optimistic about its prospects.
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In fact, the retailer is now expected to more than double its earnings next year. Trading on a forward price-to-earnings (P/E) ratio of 16 and having the capacity to deliver further growth, it could offer good value for money on a long-term view.
Next’s recent trading update was significantly ahead of its own expectations. It forecasts a reduction in net debt of £460m this year. Meanwhile, its sales prospects are relatively robust despite an uncertain future for the economy. As such, now could be the right time to buy it while it still appears to offer a margin of safety.
A British stock with long-term growth potential
Rightmove’s (LSE: RMV) valuation has also made stronger gains than other UK shares in the past three months. It’s gained 8%, as confidence has returned to the property market following lockdown.
Listings have increased in volume, due in part to the temporary change in stamp duty, which is likely to benefit the company’s near-term financial performance.
Looking ahead, Rightmove is forecast to post a 66% rise in earnings next year. It trades on a price-to-earnings growth (PEG) ratio of just 0.5. That suggests a significant improvement in its financial performance has yet to be priced in by the stock market.
The company’s recent update highlighted its continued focus on offering innovative new products that could strengthen its market position. As a result, now could be an opportune moment to buy a slice of the business for the long term.
Investing money in shares today
Although the prospects for UK shares such as Next and Rightmove may be improving, continued economic uncertainty may dissuade some investors from buying them at the present time. Clearly, short-term gains may prove to be limited depending on how the economy performs.
However, from a long-term perspective, attractive valuations and improving growth prospects could lead to share price gains. Therefore, now could be the right time to build a portfolio of sound businesses.
These should benefit from a likely recovery in the stock market in the coming years.
