Much as I like the idea of UK shares that double my money fast, realistically speaking, it’s not always possible in record time. Moreover, constantly going after fast returns can lead us to make high-risk investing decisions. I’d rather make at least some, if not most of my investments in stocks that I know will grow over time, instead.
Here, I look at three promising UK shares that will give me good returns in the medium term, if not sooner.
#1. Clean energy gets a boost
This one is a no-brainer. There’s a massive push around the world to invest in climate friendly technologies. It’s impossible to talk about climate friendly companies without invoking poster-boy Tesla, but there are others to consider closer home as well.
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FTSE 250 company The Renewables Infrastructure Group is one example. TRIG invests (profitably) in clean energy companies, with a portfolio concentrated on solar and wind projects. Its 5.3% dividend yield is noteworthy too. It’s one for both income and growth.
#2. Fashion conscious
Don’t let the name Associated British Foods fool you.The FTSE 100 company’s biggest revenue generating brand is the fast-fashion retailer Primark. Despite it being a bricks-and-mortar retailer in a year of lockdowns, it actually expects both sales and profits to rise this year.
Even though its share price has seen a smart pick-up in the stock market rally and it now has an earnings ratio of 39 times — almost the same as the FTSE 100 pharmaceuticals giant AstraZeneca, which has had a stand-out year — I reckon its share price can rise further as retail demand bounces back.
Retail demand will likely rise now that we have more control over the pandemic and Brexit uncertainty likely to be out of the way soon. Moreover, demand for fast fashion is here to stay, and Primark has positioned itself well in the market, making the UK share a likely winner over time. I have high hopes for ABF based on this.
#3. UK shares for getting healthy
Another stock I like in the hopefully soon-to-be-post-pandemic world is Gym Group. I last wrote about it in mid-August when gym stocks were pretty much down in the dumps. Ever since, the small-cap stock’s share price has risen almost two-fold. It has increased even more — by three times — since the stock market crash earlier this year.
Of course its financials have taken a beating this year. With no revenues on the one hand and fixed-costs of gyms still to be incurred, it has seen quite the cash burn. But I see a good long-term future for the segment. Rising health awareness, easier access to gyms, and at affordable prices will continue to increase their demand. There might be bumps along the road for Gym Group but I think that over the next few years it stands a good chance of being a winning UK share.
