The Motley Fool

Should I buy these 3 reopening stocks (including this FTSE 100 share) in May?

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.

A stock price graph showing growth over time, possibly in FTSE 100
Image source: Getty Images.

Demand for UK shares has risen over the past few weeks as hopes over the economic recovery have picked up. Uncertainty over global activity remains high as the Covid-19 crisis drags on. But it’s possible that investor interest in so-called reopening stocks will continue rising in the days and weeks ahead. These sort of shares stand to gain the most from retreating Covid-19 lockdowns and travel restrictions.

 Should I buy these UK reopening stocks for my ISA in May?

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. And if you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio.

Click here to claim your free copy now!

One of my FTSE 100 favourites

Associated British Foods (LSE: ABF) would be an attractive UK share to buy during any usual economic recovery. But I think the FTSE 100 stock is a particularly great company to buy this time around. Why? Well I think clothing spending is likely to be particularly high following the end of Covid-19 restrictions. This bodes well for this reopening stock’s fast fashion Primark division.

News of huge queues forming outside its storefronts have been plastered all over the papers recently as people have sought to glam up and refresh their wardrobes as they hit the town (and the workplace) again. Indeed, Primark enjoyed record weekly sales in England and Wales during the seven days to 12 April. I think ABF is a great pick for long-term share investors as the business seeks to expand its presence on foreign shores. But bear in mind that rising concerns over sustainability could cause profits growth to disappoint if consumers begin to turn their backs on fast fashion.

Man-made threats

I don’t think Gem Diamonds (LSE: GEMD) is an attractive reopening stock to buy today, however. That’s even though consumer spending is likely to receive a jolt. Buying UK mining shares requires a healthy tolerance of risk as a variety of exploration and production problems can unexpectedly occur. However, in the case of this company I’m chiefly concerned by the soaring popularity of lab-grown diamonds and how this will damage long-term profit. Today Pandora, the world’s biggest jewellery chain, said it will no longer sell mined stones on ethical and environmental concerns. It will sell artificial diamonds only, a move that could be replicated by other major chains before too long.

A better UK reopening stock

I’d be happier buying Wizz Air (LSE: WIZZ) shares for my Stocks and Shares ISA today. Of course this reopening stock also carries its fair share of risks today as Covid-19 infection rates remain buoyant in large parts of Europe. still, I think this UK share has a much brighter long-term future than Gem Diamonds. Firstly, the low-cost airline segment is expected to drive the recovery in the broader aviation sector. Secondly, this particular operator has significant exposure to Central and Eastern European emerging markets, regions where travel spending is growing strongly. Things are also looking up in the shorter term, too, with European Union lawmakers proposing plans to permit inbound travel under certain conditions. It’s possible that the continent’s airways could be buzzing again in a matter of weeks.

FREE REPORT: Why this £5 stock could be set to surge

Are you on the lookout for UK growth stocks?

If so, get this FREE no-strings report now.

While it’s available: you'll discover what we think is a top growth stock for the decade ahead.

And the performance of this company really is stunning.

In 2019, it returned £150million to shareholders through buybacks and dividends.

We believe its financial position is about as solid as anything we’ve seen.

  • Since 2016, annual revenues increased 31%
  • In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259
  • Operating cash flow is up 47%. (Even its operating margins are rising every year!)

Quite simply, we believe it’s a fantastic Foolish growth pick.

What’s more, it deserves your attention today.

So please don’t wait another moment.

Get the full details on this £5 stock now – while your report is free.

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Associated British Foods 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.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.