These UK shares performed best for me in 2020

There were bargains to be had in UK shares after the market crash in 2020. These three picks in particular have generated outsized gains in my portfolio.

| More on:

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.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

I will be glad to see the back of 2020. However, the pandemic and the market crash did allow me to pick up some share price bargains. These three UK shares performed the best for me in 2020.

Fevertree

Buy price: 933p on 18 March 2020
Current price: 2,538p
Gain: 172%

I bought FTSE AIM UK 50 index member Fevertree (LSE: FEVR) right in the depths of the market crash. At the time, I was looking to buy shares in companies with strong liquidity and solvency positions that could survive a protracted pandemic. But, I also wanted solid profit margins and high revenue growth. Shares like that should not only survive the pandemic but prosper as the situation improved. Fevertree fit the bill on all counts.

Fevertree outsources manufacturing; thus, it can respond to disruption quickly, like that brought by the pandemic. It has very low debt, and its operations generate plenty of cash. It was even able to increase its dividend in September. Once the pandemic is over, the company should continue expanding its product offering and market presence in the UK and overseas.

Wizz Air

Buy price: 2,150p on 23 March 2020
Current price: 4,786p
Gain: 123%

FTSE 250 member Wizz Air‘s (LSE: WIZZ) share price was flying before the pandemic left planes grounded worldwide. Based in Central and Eastern Europe (CEE) with a fleet of young planes, the company was in a strong position. Operating costs are lower there, and competition for routes is not fierce. The market for air travel in CEE is growing faster than average, meaning Wizz Air was flying more and more passengers at a low cost. Cash was pouring in, and a €1,501m pile had built up before the pandemic hit.

My thinking was that this cash pile would see the company through a protracted pandemic. It has done more than that. Wizz Air has been adding routes and bases and expanding its fleet. People will start flying in large numbers again eventually. When they do, Wizz Air should be able to fly more passengers than ever before. Yes, 2021’s annual report (covers up to March 2021) will be ugly. However, given the company has a track record of generating profits, I expect it to hit smooth air soon.

Burberry

Buy price: 1,355p on 18 May 2020
Current price: 1,829p
Gain: 35%

I bought FTSE 100 member Burberry (LSE: BRBY) after the lows seen in the market crash. Since then, it has been a bumpy road, but overall I am happy with the double-digit gain the position is now sitting in. My reasons for buying were simple. The Asia-Pacific region, including China, is Burberry’s largest market. That region was handling the pandemic relatively well, and sales there looked set to recover quicker than the knocked down share price was suggesting.

That region did on the whole recover in line with my expectations, especially in China and South Korea. The US also saw a strong recovery, but the European, Middle Eastern, and Japanese markets are still suffering. International travel needs to recover before Burberry really gets going again. However, I am glad I bought Burberry when I did.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

James J. McCombie owns shares of Burberry, Fevertree Drinks, and Wizz Air Holdings. The Motley Fool UK has recommended Burberry, Fevertree Drinks, and Wizz Air Holdings. 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.

More on Investing Articles

Arrow symbol glowing amid black arrow symbols on black background.
Investing Articles

Down 5%, Glencore’s share price looks a serious bargain to me now

Glencore’s share price looks undervalued to me, supported by strong earnings growth prospects and the potential resumption of extra shareholder…

Read more »

Young brown woman delighted with what she sees on her screen
Investing Articles

I’d invest £6,580 in this FTSE 250 REIT for £500 passive income

This FTSE 250 renewable energy enterprise is on track to become a Dividend Aristocrat! Here’s how I’d invest to earn…

Read more »

Investing Articles

Buying 1,000 of some dividend shares today unlocks £45 in weekly passive income!

These shares are among the biggest dividend payers in the FTSE 100. Should investors be buying them now to earn…

Read more »

Young female business analyst looking at a graph chart while working from home
Investing Articles

If I’d put £5k in index funds 5 years ago, here’s what I’d have now

Investing in index funds is an excellent way to grow wealth with minimal effort. But how much money can investors…

Read more »

Investing Articles

10.2% yield! 1 of the top income stocks to buy in July?

A 10% yield's pretty rare, but this firm's been growing shareholder payouts for nine years! Does that make it one…

Read more »

Investing Articles

‘FTSE 100 to skyrocket to 10,000’! 1 cheap stock I’d buy before the surge

Analyst forecasts predict a massive surge for the FTSE 100 may be coming by April 2025! Should investors snap up…

Read more »

Investing Articles

My Taylor Wimpey share price prediction for the second half of 2024

Having underperformed the FTSE 100 from January to June, our writer reckons the Taylor Wimpey share price might enjoy a…

Read more »

Investing Articles

£10k in savings? Here’s how I’d aim to turn it into a £4,894 annual passive income with Aviva shares

Aviva might be one of the FTSE 100's hottest dividend shares right now. I'm banking on it to provide me…

Read more »