The Motley Fool

3 hot UK shares I’d buy this summer

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.

Two women friends sightseeing in summer while on vacation.
Image source: Getty Images

UK shares are performing well so far this year. The FTSE 100 is up by 13% year-to-date and a pleasing 18% over the past year. UK shares are still relatively cheap versus other global markets, but I think their upward momentum could continue.

So, I’m looking at shares that have recently reported business strength. When a company reports trading that’s better than management expectations, it can understandably result in a rising share price. Not just for the day, but for months or even years.

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!

Future stock market returns

One example is Future (LSE: FUTR), a global platform for specialist media. In May, it reported record first-half revenue and profit, materially ahead of market expectations. Its share price responded positively on the day and has risen even higher since then.

I reckon these hot UK shares have further momentum that could drive the share price higher over the summer. Management also expects full-year results to be “materially ahead” of market expectations.

Future has two main divisions — media and magazines. The performance was driven by digital advertising and e-commerce growth in the media division. It also reported record user engagement with online user growth of 31% year-on-year.

A word of warning, however. The company remains cautious about the wider macroeconomic outlook associated with Covid-19.  Also, changing user habits could affect Future’s advertising revenues. With an increasing use of mobile devices, Future will need to ensure its advertising offering stays relevant.

That said, these UK shares are still cheap in my opinion. Offering growing earnings, reasonable profit margins and a glowing outlook, I’m tempted to add some to my Stocks and Shares ISA.

So far so good

DFS Furniture (LSE:DFS) recently reported a strong trading performance. Total orders were up a staggering 92% in Q4 vs the same period in 2019.

This performance was driven by customers who’d been waiting for showrooms to open post-lockdown. In addition, it looks like people have increased their spending on home items in the past year. A combination of higher savings and spending more time at home seem to have sparked the desire for a new sofa.

It’s worth pointing out that more recent revenue growth could be affected by sector-wide shipping delays, Covid-19 disruption of factory production and higher raw material costs.

Overall, the business is still set for growth. Its share price is up by 69% over the past year, but I still think there’s room for further gains.

UK shares to sit and hold onto

I think the trends that DFS is seeing bode well for SCS (LSE:SCS) too. In fact, I’m tempted to buy both. SCS has a stronger balance sheet with plenty of cash. It also reported strong performance in its last interim results. That was several months ago in March, so I reckon it’s likely due another update soon.

Some of the best UK shares to invest in are those of smaller companies, in my opinion. With a market capitalisation of £115m, I’d say SCS falls firmly in this group.

The downsides that SCS is facing are likely to be similar to DFS, namely higher material costs and shipping delays. That said, I see SCS as a well-managed company and it’s well-funded too. At a price-to-earnings ratio of 13x its shares are relatively cheap, in my opinion. 

In conclusion, I’d consider buying all three shares this summer. 

Is this little-known company the next ‘Monster’ IPO?

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.

Click here to see how you can get a copy of this report for yourself today

Harshil Patel 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.

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.