As the government pushes ahead with its roadmap to unlock the economy, I’ve been looking for UK shares to buy for my portfolio. I think there are a handful of companies that could benefit from the reopening. Here are five of my favourites.
UK shares to buy
No list of UK shares to buy for the recovery would be complete without including hospitality companies. So, with that in mind, I’d purchase pub operators Weatherspoons and Young And Co’s Brewery.
Both of these businesses have attractive individual qualities. Wetherspoons has carved out a niche in the market by offering good food and drinks at attractive prices.
Meanwhile, Young’s focuses on the higher end of the market. Its food and drink selection is tailored to consumers willing to pay a bit more for local produce and restaurant-quality meals.
As the economy reopens, I think both of these companies will benefit from increased consumer spending. That’s why I reckon they’re some of the best UK shares to buy today and would acquire both.
The most considerable risk both face is the risk of another coronavirus wave. This may force the government to backtrack on reopening plans and consumers to stop spending. This would hurt the two pub operators’ recoveries.
Construction boom
The UK construction market is already benefiting from low interest rates and consumer savings. Moreover, it looks as if that trend will continue as the country slowly exits lockdown. As such, I think some of the best UK shares to buy have exposure to the construction sector.
I’d buy Kier and Morgan Sindall to invest in this theme. These companies may not be suitable for all investors because the construction industry is incredibly volatile. Slim profit margins and high costs mean projects can quickly become unwieldy. Kier is only too aware of this. Over the past few years, the company has been pulling out all the stops to avoid collapse.
Nevertheless, I think it’s a great recovery play as it should benefit from increased government spending on infrastructure projects over the next few years. Moreover, management believes the company is well-placed to pick up new government mandates.
I think the same is true of Morgan Sindall. What’s more, the company has a stronger balance sheet than Keir, and it’s also several times the size. As a bonus, the stock offers a yield of 3.2%. I’d buy Morgan for income and growth and Kier as a recovery play.
Online business
The final company that makes it into my basket of UK shares to buy for June is Naked Wines. This is a growth play rather than a recovery investment. Sales at the online wines business have surged over the past 12 months, and management thinks new customers will stay with the company.
In addition, it’s expanding into the United States and spending more money to increase market share here in the UK. I think these initiatives will help Naked continue its growth streak. That’s why I’d buy the stock.
The main challenge Naked Wines faces is competition. It’s still making a loss as the company is spending significant sums trying to grab market share. If this continues, the firm may never make a profit.
