If this sounds outlandish, I assure you it is not. With enough patience and the right choice of UK shares, it is possible for me to make 1,000% returns on an investment and even more.
Here is how I plan to do so.
How to select the right shares
To put it another way, I can earn my intended 1,000% return on investment if the price of a share I buy increases by 10 times (or more). One indicator that I look at is past share price behaviour.
If a share’s performance has been healthy over time, the company is financially sound, and there are no negative disruptions in the offing for the sector it operates in, then chances are good, in my opinion, that the share will continue to perform.
There are several examples among FTSE 100 stocks of this trend, and across sectors ranging from safe ones like healthcare to cyclical ones like retail and everything else in between.
Here are two stocks that have made great investments in the past and I reckon will continue to do so in the future as well.
#1. Ocado: right place, right time
If I had invested in Ocado (LSE: OCDO) at the average share price during 2011, I would have earned around 1,350% by now. Ocado has benefited from the growing online sales industry. The pandemic only increased its popularity further as ordering groceries in was a safe and convenient option. While its growth is expected to subside this year, there is little doubt that Ocado is still expanding.
This is one reason that, on average, its share price is up 24% from the 2020 average price. Once the lockdown in the UK eases, it may fall from these levels but I think that will be temporary.
The downside, though, is that competition is heating up. Other supermarkets, like Tesco, are seeing a sharp rise in online sales. For the final quarter of 2020, it reported an 80%+ increase in online sales in the UK, compared to a 7.6% overall sales increase for the market.
If Ocado is able to maintain its position, I think it will continue to be a rewarding investment over time.
#2. Ashtead: construction boom ahead
If I had invested in US-focused construction biggie Ashtead in 2011, my investment would have grown by 2,250% by now. The FTSE 100 stock has seen its share of ups and downs, but broadly it has been on the rise.
Despite some hit to its financials in 2020, I am fairly confident that the Ashtead share will continue to be a good investment. More than half its revenues are from the US, which is slated for high growth this year. While this will partly be a rebound from the dip in 2020, huge government spending on infrastructure creation will be good for Ashtead too.
To conclude, both Ocado and Ashtead would be my go-to stocks for trying to hit the target of 1,000%+ investing returns in the future.
