The Motley Fool

I think these small-cap stocks are the best buy-and-hold UK shares in a post-pandemic world

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Screen of various price trends, possibly in FTSE 100
Image source: Getty Images.

The significant upside growth potential of investing in small-cap stocks is a huge advantage they have over their FTSE 100 blue-chip counterparts. Combine this with depressed share prices as a result of the coronavirus pandemic and subsequent stock market crash, and I think there’s a lucrative investment opportunity on the cards.

As lockdown restrictions in the UK are gently eased, pubs, restaurants, and non-essential retailers are back open for business. Much of the impact remains to be seen, but the economy is showing early signs of a steady recovery. For investors chasing market-beating returns, I think these small-cap stocks are among the best UK shares to buy-and-hold over the coming years.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. And if you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio.

Click here to claim your free copy now!

Best UK shares to buy and hold in a post-pandemic world

Perhaps unsurprisingly, The Gym Group’s (LSE: GYM) share price is down 52% since mid-February after plunging 75% in the depths of the sell-off. After all, the budget fitness provider lost around a fifth of its membership during the lockdown period as facilities closed across the nation. However, with indoor gyms given the go-ahead to re-open their doors from 25 July, things are beginning to look up.

The group had been growing at an impressive rate prior to outbreak of Covid-19 thanks to the strength of its low-cost business model. Moreover, provided the company can recover a sufficient portion of its membership, the shares should continue to rise. For those able to stomach the additional risk, I reckon that on balance, the risk-reward picture is sufficiently attractive to justify a buy-and-hold purchase.

Another company lifted by the easing of lockdown restrictions is Marston’s (LSE: MARS). Hit hard by the sell-off, the pub stock’s share price is still down by 62% in 2020. The company will inevitably face financial hardship over the coming months given its first-half profit fell by more than 70%.

That said, Marston’s dominant market position and large customer base will be of immense help. As Brits make a swift return to local pubs and restaurants, Marston’s will be a huge beneficiary. I expect significant share price appreciation and healthy dividends in the years to come.

A contrarian pick

Finally, as a perhaps contrarian pick, I think Boohoo (LSE: BOO) could be a fantastic buy-and-hold investment. The company has stumbled upon difficult times recently regarding working conditions, and its share price has tanked as a result. However, the company has since pledged to raise standards. Hence, its brand may not be affected poorly over the long term.

Boohoo’s popularity, especially among young people, should not be underestimated and the underlying business strategy is extremely effective. In fact, I think there’s plenty more room for the company to grow over the coming years. Consequently, I see the share price pullback as an opportunity to buy at a discount.

Ultimately, each of these small-cap stocks boasts huge upside potential over the long term, in my eyes. As such, I reckon they justify their place among the best UK shares to buy and hold in a post-pandemic world.

Looking for more top buys? Take a look at this small-cap stock with huge growth potential...

The high-calibre small-cap stock flying under the City’s radar

Adventurous investors like you won’t want to miss out on what could be a truly astonishing opportunity…

You see, over the past three years, this AIM-listed company has been quietly powering ahead… rewarding its shareholders with generous share price growth thanks to a carefully orchestrated ‘buy and build’ strategy.

And with a first-class management team at the helm, a proven, well-executed business model, plus market-leading positions in high-margin, niche products… our analysts believe there’s still plenty more potential growth in the pipeline.

Here’s your chance to discover exactly what has got our Motley Fool UK investment team all hot-under-the-collar about this tiny £350+ million enterprise… inside a specially prepared free investment report.

But here’s the really exciting part… right now, we believe many UK investors have quite simply never heard of this company before!

Click here to claim your copy of this special investment report — and we’ll tell you the name of this Top Small-Cap Stock… free of charge!

Matthew Dumigan has no position in any of the shares mentioned. The Motley Fool UK has recommended boohoo group, Marstons, and The Gym Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.