UK share markets continue to have a terrific tear-up in the wake of positive Covid-19 vaccine news. The FTSE 100 is knocking on the door of fresh five-month highs. Meanwhile the FTSE 250 has just hit levels not seen since late February.
It’s too early to say whether UK share investors have got a bit carried away with the latest coronavirus news. What I am prepared to say, though, is that now is a great time to go shopping for UK shares. There are too many top stocks trading much too cheaply following the 2020 stock market crash to miss out on. I’ve continued buying for my Stocks and Shares ISA despite the uncertain macroeconomic environment. And I plan to keep on investing in the weeks and months ahead.
Time to go UK share shopping!
I already own shares in boxbuilder DS Smith (LSE: SMDS). But I’m tempted to add more following significant share price weakness in 2020. Right now this FTSE 100 stock trades on a forward price-to-earnings (P/E) ratio of 13.5 times. And its corresponding dividend yield of 4% also beats the broader UK share price average by half a percentage point.
I bought this UK share for my ISA a few years back. Its acquisition-led growth strategy, which bolstered its position in European emerging markets and more recently took it into the US, appealed greatly to me. I also liked the significant uplift that M&A gave to its product ranges, and the huge sums it’s investing in packaging design to capitalise on a fast-moving retail landscape and a growing demand for sustainability.
What’s become particularly apparent in 2020, though, is the profits boost DS Smith will receive in the years ahead as e-commerce takes off. Online shopping activity has been rising steadily over the past decade. But Covid-19 lockdowns have changed the game, with new shoppers logging on for the first time in 2020 and existing e-commerce users hitting the virtual high street too.
A FTSE 100 firecracker I bought for my ISA
You don’t just need to take my word for it though. DS Smith itself commented earlier this month that “the step-change in use of e-commerce is clearly established across our territories,” the business noting “very high demand from customers for e-commerce packaging as we head into the festive season.”
The explosion in online shopping in 2020 has significantly changed the long-term outlook for the likes of DS Smith. Companies across the world have invested heavily to grab onto this exciting trend by improving their websites, logistics operations, and other e-commerce-critical systems. At the same time fast broadband is becoming more widespread and deliver infrastructure and services improving, boosting the user experience and lifting online shopping activity still further.
I think DS Smith has all the tools to deliver stunning earnings growth in the years ahead. And I expect to make a lot of money from my Stocks and Shares ISA as a result. But it’s just one of many top UK shares I’m thinking of buying after the stock market crash…
