The UK stock market has gone through a difficult time of late. While some other global stock markets have thrived despite the impact of the Covid-19 pandemic, the FTSE 100 hasn’t fared so well. The UK’s primary stock index has recovered in recent months but still trades 1.7% lower than this time last year.
I still see value in UK stock investing at the moment, however. A stock market recovery has coincided with optimism surrounding the speed of the Covid-19 vaccine rollout in the UK.
Here are three UK stocks I’m backing to achieve share price growth over the next few years.
Future planning
One FTSE 250 stock which has massively outperformed the market in recent years is international media group Future (LSE:FUTR). A strong record of acquisitions over the last number of years has seen the company’s share price mushroom by more than 400% since 2018.
What I like most about Future is that it is able to charge advertisers a premium for its digital and magazine subscriptions, as they focus on highly niche areas.
For example, the company owns four separate publications related to guitars. That level of depth exists across a number of sectors, including tech, gaming, and sports.
Strong performance in its media division in the first four months of the trading year led to Future raising earnings expectations for the year.
As a colleague here has noted, the company’s focus on acquisition can leave it difficult to ascertain how sustainable its growth is. Underlying performance may not exactly be as positive as management reports – this is where the risk lies with Future.
But I’d still buy the stock today based on its strong profits and history of successful acquisitions.
Sporting endeavour
Sports fashion company JD Sports Fashion (LSE:JD) is another company I’d consider buying as part of my UK stock investing portfolio.
JD has an impressive acquisition history, and profits have remained strong due to increased online sales during Covid-19.
The company has been expanding its operation in the US, and I believe there is significant growth opportunity for JD if it can continue to acquire well in this market.
Based on its current share price of 830p, JD could be considered an expensive buy at 24 times earnings. As the company pursues an aggressive global growth plan, there is no guarantee that this will play out as expected. I’m backing the JD share price to grow despite those risks, however.
Banking on growth
Another UK stock I think has growth potential is FTSE 100 bank Standard Chartered (LSE: STAN).
While the Asia-focused bank saw its full-year profits decline by 57% as a result of Covid-19, management announced last month it would be reinstating its dividend as it forecast a return to growth by 2022.
With interest rates still at basement levels, banking stocks are still operating in difficult conditions. This is a headwind which is unlikely to reverse any time soon.
That said, there has been a strong recovery from the initial shock of Covid-19 among Asian markets. I think StanChart can benefit further from this recovery.
If the bank’s forecast of income growth of between 5%-7% by 2022 can be delivered, I think the share price can also grow with it. Barring any further economic setbacks that is. As a result I’d add the stock to my list of growth shares today.
