Many investors are currently avoiding UK shares. I think this is a huge mistake. In my opinion, there’s a whole range of blue-chip stocks in the FTSE 100 that appear undervalued.
I reckon these stocks could produce large total returns for their shareholders in the years ahead. As the UK economy recovers from the pandemic, they may be able to capitalise on the recovery.
FTSE 100 UK shares for 2021
B&M European Value has seen sales and earnings jump this year. I don’t think this is a one-off. The company has been steadily grabbing market share in the retail sector for years. Customers appear to love the group’s no-frills, low-cost offering. And as long as management follows its tried and tested playbook of keeping costs and prices low, I reckon B&M will continue to report growth in the years ahead.
Another retailer I’d buy in a basket of FTSE 100 UK shares in 2021 is Kingfisher. I think it’s fair to say the company’s management wasn’t expecting the success the owner of B&Q has seen this year. Consumers were queueing up to visit the group’s hardware stores when they reopened. Demand has continued to remain high.
The surging housing market has buoyed sales at B&Q. With the stamp duty cut set to remain in place until the end of March, I think the rising demand will allow Kingfisher to continue to perform ahead of expectations well into 2021.
On the same note, I’m also excited about the outlook for FTSE 100 homebuilder Persimmon. Rising property prices and limited supply of affordable homes suggest this business may continue to see increasing sales and profits.
Renewable energy
My research suggests Johnson Matthey may be one of the best UK shares to buy for the renewable energy revolution. The company is one of the leading authorities on battery and hydrogen technology. These two essential technologies will be critical in developing the world’s energy storage infrastructure over the next few years.
This FTSE 100 firm is a leader in other sectors as well. Its vast product portfolio and experience in working with speciality chemicals may allow it to continue to grow year after year. No matter if investors are interested in renewable energy or not, Johnson Matthey appears to have something for everyone.
Finally, one of the UK shares that look set to benefit from the ever-growing demand for e-commerce is Mondi. The paper and packing company has profited from the sector’s growth over the past few years but, as 2020 has shown, e-commerce is still in its infancy. The market is projected to grow at a double-digit rate in 2020, providing a sound financial base from which to grow well into the next decade.
As one of the few large paper and packing companies in the country, Mondi should be able to profit substantially from this growth, in my opinion.
