The Motley Fool

3 top UK stocks to buy now with £5,000

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.

man in shirt using computer and smiling while working in the office
Image source: Getty Images

Shares offer me a way to participate in the success of leading British companies as they navigate the economic recovery. If I had £5,000 I’d think of putting it into top UK stocks. Here are three I would consider picking for my portfolio.

Medical device multinational

Medical devices manufacturer Smith & Nephew (LSE: SN) benefits from its broad geographic reach. Its products have a strong reputation and the company’s medical customer base helps support premium pricing. But the pandemic knocked the company’s performance. As hospitals cancelled or postponed elective surgeries, Smith & Nephew saw sales fall badly.

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!

I see that as a temporary aberration. There is always a risk that any further lockdowns could again hurt sales. But in its recent quarterly results, the company revealed a significant jump in sales. Despite that, the Smith & Nephew share price has fallen 10% in the past month. It is down 10% over the past year too. To me, that looks like an overreaction. I expect medical procedures to return to normal levels at some point and Smith & Nephew should be a beneficiary, as the results suggest. I would consider putting a third of my £5,000 into the company now.

Top retail stock: JD Sports

As the Olympic Games fade into memory, hopefully there will still be an ongoing sales boost for JD Sports (LSE: JD). But the company has proven it is able to grow revenues and profits even without the extra interest in sports generated by a high-profile event.

Retail can be a very challenging business, which is why I’m impressed by JD’s proven ability to grow revenues and profits. Further geographic expansion will hopefully help that continue, although one risk is that it comes at lower profit margins. Operating across diverse markets can add costs.

But as the world moves further towards the casualisation of office and leisure clothing, I think JD’s star could continue to shine brightly. It has proven expertise in the mechanics of successful retail, including in its growing online operation.

High street bank

The third of the top UK stocks across which I would consider spreading my £5,000 is Natwest.

The bank is a household name, which is one of the reasons I like it. Its brand recognition and wide customer base should help to support revenues for years to come. Meanwhile, as the company buys back shares from the government, it can cancel some and boost earnings per share.

One risk here is similar to the risk I see at competitor banks such as Lloyds. With heavy exposure to the UK banking market, Natwest is sensitive to changes in the UK economy. If the economy weakens, that could hurt both revenues and profits.

Top UK stocks: my move

If I had £5,000, I would consider buying these three top UK stocks for my portfolio now. But even without that amount to invest, I am attracted to the companies and would still consider buying these shares. I would buy all three, so I could get some risk reduction from diversification.

One FTSE “Snowball Stock” With Runaway Revenues

Looking for new share ideas?

Grab this FREE report now.

Inside, you discover one FTSE company with a runaway snowball of profits.

From 2015-2019…

  • Revenues increased 38.6%.
  • Its net income went up 19.7 times!
  • Since 2012, revenues from regular users have almost DOUBLED

The opportunity here really is astounding.

In fact, one of its own board members recently snapped up 25,000 shares using their own money...

So why sit on the side lines a minute longer?

You could have the full details on this company right now.

Grab your free report – while it’s online.

Christopher Ruane owns shares in Lloyds Banking Group. The Motley Fool UK has recommended Lloyds Banking Group and Smith & Nephew. 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.