Volatility has returned to the stock market over the past couple of days. Indeed, we’ve seen treble-digit falls in the US and UK indices and most stock screens have been a sea of red. But yesterday, despite the general market carnage, some UK shares went up. And I reckon their strength could be a jumping-off point for further research with a view to me buying some of the stock.
Why I think these are UK shares to buy
For example, Bloomsbury Publishing (LSE: BMY) crept a little higher after showing strength all week. On Tuesday, the Harry Potter publisher released an upbeat half-year results report declaring trading had been “excellent”. Indeed, in the first six months of the firm’s trading year, profit grew by 60% year-on-year. Chief executive Nigel Newton said in the report it’s the highest first-half earnings figure since 2008 and “exceeded the Board’s expectations.”
Online book sales and e-book revenues were “significantly higher.” The consumer division achieved a 17% increase in revenue and pre-tax profit shot up by £2.1m to £2.7m. Meanwhile, Newton reckons the non-consumer division benefited from the “accelerated shift” by academic institutions to digital products to support remote learning. The division recorded a 47% uplift in sales in the period.
It seems Bloomsbury Publishing has been a coronavirus winner. The firm ended the period with a net cash position on the balance sheet worth just over £44m. The directors decided to reinstate the shareholder dividend and declared an interim payment of 1.28p per share, which equals the prior-year figure.
I reckon the strength of trading and robust financial position of the company is attractive. And with the share price near 252p, the forward-looking earnings multiple is just below 17 for the trading year to February 2022. Meanwhile, City analysts expect a robust double-digit percentage increase in earnings that year.
Another share showing positive progress on my screen yesterday was housebuilder Bellway (LSE BWY). And, in the full-year results report released a few days ago, the company reported “an encouragingly strong start to trading in the new financial year.”
There was a “record” forward order book on 4 October worth almost £1,870m. And the work-in-progress position “provides a solid platform for recovery in the year ahead.” Indeed, despite the ongoing pandemic, productivity levels are improving and running between 85% and 90% of last year’s rate.
Although economic uncertainty is still around, the directors reckon underlying demand for housing is “strong”. But there’s a risk further lockdowns could shutter sites and activity in the sector. However, the directors were confident enough in the outlook to resume shareholder dividend payments. Indeed, the balance sheet is ungeared and City analysts predict robust double-digit advances in earnings ahead.
Meanwhile, Bellway’s valuation is undemanding. With the share price near 2,354p, the forward-looking earnings multiple is just below eight for the trading year to July 2022. Meanwhile, the anticipated dividend yield is around 4.6%.
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Kevin Godbold has no position in any share mentioned. The Motley Fool UK has recommended Bloomsbury Publishing. 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.