3 UK shares to buy now

Rupert Hargreaves explains why he would buy these three UK shares that are all experiencing sales growth as the economy reopens.

| More on:

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.

As the global economy reopens, I have been looking for UK shares to add to my portfolio that may profit from the reopening. 

There are a handful of companies that I believe are better positioned than most to ride the recovery. Here are my three favourite stocks I would buy to play this theme right now. 

Inflation Is Coming

Inflation is out of control, and people are running scared. But right now there’s one thing we believe Investors should avoid doing at all costs… and that’s doing nothing. That’s why we’ve put together a special report that uncovers 3 of our top UK and US share ideas to try and best hedge against inflation… and better still, we’re giving it away completely FREE today!

Click here to claim your copy now!

UK shares to buy 

The first stock on my list is Premier Inn owner Whitbread (LSE: WTB)

This company is already experiencing a rebound in demand from customers. According to its CEO, during the 13 weeks to 27 May, the group traded “significantly” ahead of the market as the economy reopened. 

As well as seeing higher demand from consumers, Whitbread is also opening new hotels. It opened 10 new hotels with 1,189 rooms in the 12 weeks to the end of May. 

This combination of higher consumer confidence and an enlarged hotel footprint should prove to be a double tailwind for the company. 

However, rising coronavirus cases may hurt consumer confidence. This could set back the company’s recovery. Another economic downturn could also reduce demand for hotel rooms. 

Despite these risks, I would buy the company for my portfolio of UK shares today. 

Travel demand

As well as Whitbread, I would buy hotel franchisor Intercontinental Hotels (LSE: IHG). I think the group should benefit from the same tailwinds as Whitbread, namely improved consumer confidence and the opening of new properties in the months and years ahead. 

In its first-quarter trading update, the company said it had opened 7,300 rooms across its estate in the first three months of 2021. And it has a further 274,000 rooms in the pipeline.

Unfortunately, not all of these new rooms may work out. The group sold or closed a total of 61 hotels and 9,500 rooms from its portfolio in the first quarter. This figure shows Intercontinental’s growth is by no means guaranteed. 

Nevertheless, with the global travel market opening up again and hundreds of thousands of new rooms in the pipeline, I would buy this firm for my portfolio of UK shares as a recovery play today. 

Slow and steady

The final stock I would buy is distribution group DCC (LSE: DCC).

The company’s size is its most significant competitive advantage. DCC has the size and financial firepower required to roll up smaller peers and buy up growth in the highly fragmented distribution industry. Recent acquisitions include Primagaz by DCC LPG, Jones Oil by DCC Retail & Oil and Azenn by DCC Technology. 

As well as these deals, it appears as if the group as a whole is firing on all cylinders. According to its latest trading update, during the quarter ended 30 June, DCC traded “very well” and built on the solid performance recorded for 2020. The company has benefited from the reopening of the global economy and higher demand for products such as fuel oil and LNG. 

The most considerable risk hanging over the stock is the company’s large level of debt. Its acquisitive nature means DCC depends heavily on outside financing. This could be a risk if the group’s creditors decide to walk away. 

Even after taking this risk into account, I think the company’s growth potential is incredibly exciting, which is why I would buy the stock for my portfolio. 

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.

Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has recommended InterContinental Hotels Group. 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.

Should you invest the value of your investment may rise or fall and your Capital is at Risk. Before investing your individual circumstances should be considered, so you should consider taking independent financial advice.

More on Investing Articles

Female florist with Down's syndrome working in small business
Investing Articles

2 promising penny stocks to buy on the dip

As stock markets continue to correct, I am hunting for oversold penny stocks that I think could help turbocharge my…

Read more »

Hand of person putting wood cube block with word VALUE on wooden table
Investing Articles

I wouldn’t buy Bitcoin today. FTSE value stocks look much better value to me

Now looks like a promising time to buy UK value stocks, while Bitcoin still looks far too risky for me.

Read more »

Portrait of elderly man wearing white denim shirt and glasses looking up with hand on chin. Thoughtful senior entrepreneur, studio shot against grey background.
Investing Articles

The Rolls-Royce share price is below 85p. Here’s what I’m doing!

The Rolls-Royce share price has suffered this year. Trading for below 85p, this Fool decides whether this is an opportunity…

Read more »

A young woman sitting on a couch looking at a book in a quiet library space.
Investing Articles

4 dividend stocks to buy as inflation soars!

I'm hunting for the best dividend stock to invest in as global inflation soars. Here are several high-dividend-yield shares that…

Read more »

Happy young female stock-picker in a cafe
Investing Articles

UK shares to buy now: 3 big fallers I’d snap up

Our writer thinks this trio of strong business performers could be attractive UK shares to buy now for his portfolio.

Read more »

Lady researching stocks
Investing Articles

Could a falling stock market help me get rich?

When the stock market falls, what does it mean for our writer's portfolio? Here's why it could be an opportunity.

Read more »

Hand holding pound notes
Investing Articles

Should I buy these two 12%-yielding dividend shares for my Stocks and Shares ISA?

Do these double-digit dividend yielders offer our author the right balance of risk and reward for his Stocks and Shares…

Read more »

Smiling young man sitting in cafe and checking messages, with his laptop in front of him.
Investing Articles

3 reasons to buy Lloyds shares at 43p

Our writer outlines three factors that make him bullish on Lloyds shares, as well as one noteworthy risk facing the…

Read more »