The Motley Fool

3 UK shares to buy

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.

Union Jack flag hanging from a building
Image source: Getty Images

Looking at the latest economic data, I think the UK economy is set for a strong recovery this year. With that being the case, I’ve been searching for UK shares to buy, which may capitalise on this rebound. 

Here are three blue-chip companies I’d buy for my portfolio that I think could benefit or are already benefiting from surging demand. 

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!

UK shares to buy

The first company on my list is B&Q owner Kingfisher (LSE: KGF). All indicators point to the fact that the DIY and construction market across the UK is recording rapid growth.

As one of the largest DIY retailers in the country, Kingfisher is and could continue to benefit from this trend. According to its first-quarter trading update, like-for-like sales in the three months to the end of April increased 22.5% compared to the same period in 2019. 

Based on this growth, the corporation now expects to report a pre-tax profit ahead of previous expectations for the year. That’s one of the key reasons the firm is on my list of UK shares to buy. 

Of course, the company isn’t guaranteed to hit this target. Another economic lockdown could upset forecasts, and rising costs could eat away at profit margins. This may cause management to revisit profit projections. 

Still, I’d buy the stock for my portfolio today. 

Financial markets

Another company that sits on my list of the best UK shares to buy is the London Stock Exchange (LSE: LSEG). It’s currently experiencing one of its most lucrative periods in recent history. In the first quarter of this year, LSEG saw its strongest IPO start to the year since 2007, with 20 floats raising £5.6bn. This could produce windfall profits for the exchange operator.

As well as this boom, the firm may report higher revenues from increased trading volumes if the UK economy reports strong growth in the years ahead. 

Unfortunately, stock markets are incredibly cyclical. The current IPO boom may not last. And if economic growth slows, trading activity might fall. This would almost certainly impact the group’s top and bottom lines. 

Despite these risks, I’d buy the stock for my portfolio today as a UK recovery play. 

Pent-up demand 

The final business on my list of UK shares to buy is the over-50s lifestyle company Saga (LSE: SAGA). While this enterprise came close to the edge last year, it’s taking on the reopening with a stronger balance sheet and re-focused business model. According to its latest trading update, demand for its cruises in the next few years is running ahead of expectations.

Meanwhile, its financial services business provides a steady stream of profits to support the rest of the group.

To develop the financial arm, the company recently appointed Steve Kingshott as Insurance CEO. He’s currently CEO of Tesco Underwriting and chief insurance officer at Tesco Bank.

Key challenges the company faces are a lack of growth in its financial business and coronavirus restrictions, which could derail recovery plans at the cruise division. A further setback may also place pressure on the group’s balance sheet. 

Nevertheless, I’d buy the stock for my recovery portfolio today as I think it’s one of the best UK shares to buy for the reasons outlined. 

Our 5 Top Shares for the New “Green Industrial Revolution"

It was released in November 2020, and make no mistake:

It’s happening.

The UK Government’s 10-point plan for a new “Green Industrial Revolution.”

PriceWaterhouse Coopers believes this trend will cost £400billion…

…That’s just here in Britain over the next 10 years.

Worldwide, the Green Industrial Revolution could be worth TRILLIONS.

It’s why I’m urging all investors to read this special presentation carefully, and learn how you can uncover the 5 companies that we believe are poised to profit from this gargantuan trend ahead!

Access this special "Green Industrial Revolution" presentation now

Rupert Hargreaves 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.