Shares to buy: 2 UK stocks I’d snap up today

Shares have had a great run over the last year. However, Edward Sheldon is still seeing buying opportunities. Here are two stocks he’d snap up today.

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Shares have had a great run recently. The FTSE 100 index, for example, is up about 13% over the last year. I’m still seeing plenty of buying opportunities however. That said, here are two UK shares I’d buy today.

Retail isn’t dead

Many consumers have a lot of cash to spend right now and a great way to play this theme, in my view, is JD Sports Fashion (LSE: JD). It’s a leading retailer of athletic footwear and sportswear/athleisure. It trades from about 3,300 stores across 29 countries as well as online.

JD appears to have a lot of momentum at present. Earlier this month, it said UK trading in the immediate period after the reopening was “particularly encouraging.” Meanwhile, it said the US market is benefitting from the stimulus cheques many people have received, with “enhanced levels of consumer demand” across all of its businesses.

JD isn’t simply a reopening play however. I think this stock has long-term growth potential. The global athleisure market is expected to grow at around 7% a year between now and 2026 on the back of a number of dominant clothing trends. JD looks set to benefit.

One risk here is that major brands are increasingly selling direct to consumers. Nike is having a lot of success with this strategy at the moment. This could have an impact on JD at some stage. In the future, there may be less need for the middle man.

Overall, however, I think this stock has a lot of potential. It’s worth noting that analysts at RBC just raised their target price for JD from 1,050p to 1,100p. That’s nearly 23% above the current share price.

Insiders are buying here

Another UK stock I like the look of right now is Team17 (LSE: TM17). It’s an under-the-radar video game developer. Its games include Monster Sanctuary, Worms Rumble, Overcooked: All You Can Eat, and The Survivalists. Recently, it has moved into the educational entertainment (edutainment) space by acquiring StoryToys, a leading publisher of edutainment apps for children.

Team17 strikes me as a very impressive company. Over the last five years, its revenue has grown from £10.4m to £83m. That represents annualised growth of more than 50%. During this period, the company’s generated very strong profits. Return on capital employed – a key measure of profitability – has averaged 29%, which is excellent.

One thing that stands out to me here is that this month, two directors at Team17 have purchased company stock. On 8 July, CFO Mark Crawford bought 4,403 shares while board member Martin Hellawell picked up 10,000 shares. I see this as a bullish development. Insiders only buy stock for one reason – to make money.

There are risks to consider, of course. One is that future game releases may not be as successful as past ones. Another is the stock’s high valuation. Currently, TM17 has a forward-looking P/E ratio of around 40. This doesn’t leave much room for error.

All things considered however, I think this stock has a lot of appeal. I see it as a good way to play the booming video game industry.

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 assessed. Consider taking independent financial advice.

Edward Sheldon owns shares of JD Sports Fashion. The Motley Fool UK owns shares of and has recommended Nike. 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.

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