I reckon that Scottish Mortgage Investment Trust (LSE: SMT) and Robert Walters (LSE: RWA) are two top UK shares to buy right now. I think both have further growth potential despite currently trading at high levels. Here’s why I’d snap up these stocks.
The investment trust
I’ve been bullish on Scottish Mortgage Investment Trust for some time. The main reason is that it has a proven long-term track record, which has consistently delivered. I like to back a stock where there’s evidence that the business model is working.
In this case, the fund managers have demonstrated their stock picking abilities over several years. Since the portfolio has a tech bias, last year was a stellar year for the investment trust. Of course, there’s no guarantee this past performance will be replicated in the the future. But it gives me some encouragement that the fund managers know what they’re doing.
I also think this is a top UK share to buy right now because of the portfolio diversification. I’ve mentioned this before that I’m getting exposure to listed companies but also a pool of private tech companies.
It’s worth noting here that as a retail investor, it would be hard for me to invest in unlisted companies directly. But I can get this exposure through Scottish Mortgage. What’s more these private companies have the potential to become public. And there are several examples of this happening in the trust. Again, I put this down to the investment skills of the fund managers.
Earlier this year, the tech sell-off hit Scottish Mortgage shares and this could happen again. As I said, there’s no guarantee that its previous impressive performance will continue in the future.
On Wednesday, Robert Walters announced its second quarter trading statement for 2021. This comes ahead of its half-year results due on 27 July.
I’ve been bullish on this stock and the Q2 2021 numbers were strong. Trading momentum across all regions during the period was positive. The recruiter even said that “profit for the full-year is now expected to be significantly ahead of the level signalled in our recent 11 June trading update.”
As a reminder, it stated in its last announcement that it expected full-year profit before tax “to be materially ahead of current market expectations.” So the fact that the company still remains on track is encouraging to me. It also indicated that the interim results at the end of this month should be positive too. But of course, this is just me speculating. I’ll have to wait and see.
What I also like about Robert Walters is that it’s in a strong financial position. The balance sheet looks in good shape with a net cash position of £113m as at the end of June. Couple this with a good economic recovery following the pandemic, and I think this should push the stock price higher.
But if there are any Covid-19 delays, then businesses aren’t likely to recruit employees, which could impact the Robert Walters share price. Companies could also be cautious on hiring as the coronavirus variants continue to spread.
Despite these concerns, I think this is a great UK share to buy for my portfolio right now.
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Nadia Yaqub 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.