2 top UK shares to buy in August

Should we see another FTSE 100 fall in August, Jonathan Smith explains two top UK shares he’s keen on buying with fresh cash.

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After some volatility this week in the FTSE 100 index, I’m already looking ahead to August (which isn’t that far away) for the top UK shares to buy. Even though the sell-off this week has rebounded, if we see a similar dip in a couple of weeks’ time, then I want to be ready and know which stocks to buy. After all, such dips can sometimes only stay for a couple of days, so I want to take advantage.

Protecting against a Covid-19 crash

The first UK share that’s a top pick in my eyes is Hikma Pharmaceuticals (LSE:HIK). It develops and manufactures a range of branded and non-branded generic medicines. This allows it to have various revenue lines open through different avenues, although like similar companies, it has to invest heavily in research and development.

One clear factor that makes it an appealing UK share for me to own is the share price performance. It’s up almost 10% over the past month, with a gain of almost 20% over the past year. 

I think one key reason for the boost in the short term is the fact that Covid-related headlines have been getting more concerning. Issues with the Delta variant and the UK lifting all restrictions is causing some investors to look for safer stocks to buy. I think Hikma ticks this box.

Core operating profit jumped 11% last year, largely thanks to the emergency drugs that were sold to help Covid-19 patients. With higher infections being seen in the UK and globally, I’d imagine Hikma will see similar strong demand this year.

One risk with buying this share is that some of its areas of operation are sensitive to political instability. I’m particularly thinking of the MENA region. If any issues arise, distribution and continuity of business for Hikma could become strained.

A top UK mining share

The second top UK share I’m looking at for August is BHP Group (LSE:BHP). It’s primarily a mining company, and one of the largest in the world at that.

The share price has been on a decent run over the past month, up 8%. It’s up 28% over a longer one-year period. Like most miners, the movement in the price of the specific metals can impact the company performance.

Copper and iron ore are the two large operating areas for BHP. In the report covering the financial year to H1 2021, it showed that copper production was down 5% but iron ore production was up 2%. Within this were some strong levels. For example, Western Australia iron ore production hit record levels.

I think the outlook is good, with mines in Australia and Trinidad and Tobago coming on-line recently.

A risk here is that the company really needs to focus on minimising operational damages along the way. It’s currently still embroiled in damage payments for the burst Samarco dam incident in Brazil a few years back. This sum will be in the billions, and so such damages can really impact financial performance.

Overall, I think both UK shares are top picks for the upcoming month, and would look to buy both for my portfolio. 

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.

jonathansmith1 has no position in any share mentioned. The Motley Fool UK has recommended Hikma Pharmaceuticals. 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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