I try to own UK shares that are diversified across sectors and sizes. Listed companies tend to fall into size groups such as large-cap, mid-cap, and small-cap. The criteria of each group tends to change over time as the stock market fluctuates.
Currently, I would describe large-cap shares as those with market capitalisations of over £10bn. Mid-cap could have a range of £2bn–£10bn. Finally, small-cap could be companies below £2bn.
Large-cap companies tend to be more mature, dominant, and leaders in their sectors. As they’re more established businesses, they can have lower growth rates but greater stability.
Smaller companies can potentially grow faster, and this can be reflected in more rapidly rising share prices. That said, they can be riskier and their share prices can be more volatile.
Mid-cap companies contain characteristics that lie somewhere in between, offering lower volatility than small-caps but more growth than large-caps.
No-brainer UK shares
I’ve found three no-brainer UK shares that I’d be happy to add to my Stocks and Shares ISA in September. One from each of the three size groups.
From the large-cap group, I’m looking at equipment rental company Ashtead (LSE:AHT). With a market-cap of over £25bn, this large industrial firm is an established player in its field. What I like about Ashtead is its exposure to US infrastructure.
Over 80% of its sales takes place in the US, and it should benefit from the US government’s plan to invest over $1trn in infrastructure projects. This bodes well for Ashtead as it rents equipment like diggers, construction tools, and cement mixers. All of these would be used to build or repair roads, bridges, and transport systems.
Business is picking up and it has ambitious growth plans. However, Ashtead does operate in a cyclical industry. Any recession could have a material impact on its share price. Weighing it up, I’d consider buying some shares for my portfolio.
Robust summer trading
My mid-cap pick is computer services firm Computacenter. Trading was “robust” in July and August, and I reckon the positive momentum could continue in September. Its recent trading statement was encouraging, and its management sound confident at beating market analysts’ expectations.
I should note that its profit margins are smaller than other companies that I like, and it operates in a competitive market.
However, Computacenter is a quality player in the IT infrastructure sector. This top UK share offers solid returns, encouraging trading momentum and even offers a 2% dividend.
Electric growth
My favourite small-cap company right now is Volex. It’s a high-quality cable manufacturer that operates in several fast-growing industries including data centres, electric vehicles, and medical devices.
It’s currently experiencing several positive trends. Customer demand is growing, profit margins are expanding, and it’s managing to successfully acquire smaller companies.
There could be some challenges with supply shortages and rising materials costs, but so far these are being managed well.
Overall, I think it’s a reasonably priced small-cap firm with excellent growth prospects. I’d definitely consider buying more of these UK shares for my ISA.
