Could the new bull market finally be upon us? I’ve explained before why it might be too early to claim that the fight against Covid-19 has reached a decisive turning point. But fresh vaccine news on Monday seems to have bolstered the chances of a breakthrough, sending UK shares higher again. The FTSE 100 for instance has leapt to fresh five-month highs.
Today was the turn of Moderna to release positive vaccine results. The pharmaceuticals colossus said that trials of its own treatment revealed a 95% rate of success, beating Pfizer’s vaccine contender with even more impressive results. Moderna will be seeking permission for rollout from US regulators in the coming weeks.
Buying UK shares for the new bull market
Clearly, another drugs giant making progress on a Covid-19 vaccine is good news for hopes of a V-shaped economic recovery. Moderna’s formula might not be the magic bullet that the world is waiting for. But for now, news that another pharma giant is making strides raises the odds on a silver bullet being found.
I’d consider buying UK shares for the new bull market today. But to be perfectly honest I’d buy them regardless of the positive news surrounding Moderna’s vaccine today.
History has shown that the world economy always recovers from major social, economic, and political disasters. And in the process the prices of UK share prices come roaring back after stock market crashes without fail, too.
From a pure investment standpoint, then, it doesn’t matter a jot to me whether a vaccine will be rolled out by the end of the year, the middle of 2021, or perhaps longer. UK share prices will eventually rebound, and someone who invests for the long term I can afford to be patient.
That said, there are plenty of UK shares I’m thinking of buying for my Stocks and Shares ISA for when the bull market begins. I think this particular stock is a great buy on account of its colossal dividend yields:
12% dividend yields!
Natural resources stocks like oil drillers and metals producers usually rise quickly during global economic recoveries. Raw materials demand usually rockets as manufacturers anticipate a sharp upturn in consumer spending.
I’d buy shares in Sylvania Platinum (LON: SLP) to ride this theme. And particularly as sales of automobiles — products in which platinum group metals (PGMs) are used in vast quantities to clean up exhaust emissions — also rise during the early stage of economic upturns. In fact I’d hold this particular stock for years to come as a rising green agenda across the globe boosts the amount of PGMs needed in catalytic converters. In particular, demand for Sylvania’s product should remain robust as new regulations in China and India concerning truck emissions kick in.
Today this UK share trades on a forward price-to-earnings (P/E) ratio of 5 times. It also carries a monster dividend yield north of 12% for this fiscal year. These sort of figures make it a brilliant buy for me as a value investor.
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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.