FTSE 100: why I’d forget the Lloyds and Cineworld share prices and buy these UK shares

I believe that the Lloyds and Cineworld share prices might eventually come crashing down to earth. I’d rather buy these UK shares for my ISA.

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Investor appetite for UK shares remains pretty lukewarm as the Covid-19 tragedy rolls on and inflation-related fears grow. But buying activity isn’t weak across the board. Demand for Lloyds Banking Group and Cineworld Group shares, for instance, continue to go from strength to strength.

The Lloyds share price has risen almost 10% since the beginning of 2021, narrowing its fall over the past 12 months to 18%. The Cineworld share price performance has been even more impressive of late, up 75% since the beginning of January. It’s now down around a fifth over the past year.

Big risks

Traders and investors might be piling into these UK shares, but I’m not tempted to buy either of them for my Stocks and Shares ISA. Let’s look at Lloyd’s first. The promise of further government support for the economy in today’s Budget might give the economic recovery an extra boost. It’s a scenario that could boost revenues and reduce bad loans at the bank. However, the threat of persistently-low interest rates and increasing competition still make the FTSE 100 firm an unappealing stock in my eyes.

macro shot of computer monitor with FTSE 100 stock market data in trading application

As for Cineworld, the rising might of the streamers — combined with uncertainty over exactly when cinemagoers will be able to flock back into its cinemas — make this UK leisure share a risk too far for me. That said, its recent entry into the world’s biggest movie market by acquiring the Regal chain of cinemas could theoretically deliver enormous profits over the long term.

2 better UK shares for my ISA

There’s no such thing as a risk-free investment, of course. But I believe there are many other UK shares that are in better shape than Lloyds or Cineworld to deliver decent shareholder returns over the long term. Here are two from the FTSE 100 I’d much rather buy for my ISA today:

#1: Associated British Foods

Primark owner Associated British Foods has troubles of its own. Margins across its cut-price clothes division are notoriously thin. And intense competition is putting more and more stress upon them. But I still expect profits at the FTSE 100 company to keep rising as it grows its global customer base. I’m particularly excited by its recent entry into the huge US marketplace. Analyst at Statista reckon the global fast fashion segment will be worth a staggering $43bn by 2029, up almost 20% from 2019 levels.

#2: Hikma Pharmaceuticals

I’d also believe the profits outlook for Hikma Pharmaceuticals looks more robust than those of Cineworld or Lloyds. The business of getting drugs onto the pharmacy shelf is always packed with risk. This UK healthcare share downgraded its profits forecasts last September after the US Food and Drug Administration delayed signing off on its generic Advair Diskus alternative. That said, I think moves to boost its manufacturing capabilities and turbocharge product rollouts (it launched 154 in 2020 alone) should allow it to make big long-term profits as healthcare spending rises across the world.

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.

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Associated British Foods, Hikma Pharmaceuticals, and Lloyds Banking Group. 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.

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