I don’t buy UK shares simply because I think they’ll rise in value in the near term. The best stocks to buy are those that are likely to provide big returns over the long term (say a decade or more), I feel.
Investing based solely on how a company’s share price could perform in the short term is a risky business. Not only can a stock unexpectedly fall in value if it announces that trading conditions have worsened. Wobbly investor confidence in response to broader economic developments can also damage a particular stock’s value.
That said, I think the following UK shares could be some of the best long-term stocks to buy today. And I’d buy them on the possibility that their share prices could soar in May too.
I think Ocean Outdoor could be a great stock to buy before it releases full-year results on Tuesday, 4 May. The company provides outdoor screens upon which businesses can advertise their brands and their products. Indications that advertising markets have started recovering certainly bode well for this UK share’s upcoming trading statement. FTSE 100 media agency WPP announced last week that all of its business lines had returned to growth in the first quarter of 2021. I think Ocean Outdoor has a very bright future, though remember that the business has to compete fiercely with other advertising platforms like print, mobile internet and TV. Future earnings growth could therefore end up disappointing.
Poised for take-off
I think Ryanair might be one of the best stocks to buy in May. The company is due to release full-year results on Monday, 17 May. And at the moment, I’m not expecting anything spectacular to emerge from report as travel restrictions across its main European marketplaces remain in place. But that’s not to say that the UK airline share might not take off in May. Reports are circulating that European nations are in talks to reopen travel corridors over the summer. Positive movement on this issue would likely thrust the share prices of Ryanair and its peers through the roof. Be aware, though, that worsening Covid-19 infection rates in the low-cost carrier’s markets could pull the share price sharply lower again.
One of the best stress-free stocks to buy?
There’s no doubt that buying UK airline shares like Ryanair involves some tolerance of risk. A less stressful stock to buy for May is Grainger. I’m certainly expecting no dramatics when the company — which is one of Britain’s biggest commercial landlords — releases half-year results on Thursday, 13 May. Latest financials in February showed like-for-like rents grow 2.4% year on year in 2020. The UK’s massive shortage of rental properties means that revenues at Grainger should keep rising too. I reckon this is a top long-term stock to buy, despite the possibility of regulatory changes governing the rental market that could hit profits.
Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead.
Because this North American company is the clear leader in its field which is estimated to be worth US$261 BILLION by 2025.
The Motley Fool UK analyst team has just published a comprehensive report that shows you exactly why we believe it has so much upside potential.
But I warn you, you’ll need to act quickly, given how fast this ‘Monster IPO’ is already moving.
Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.