While the UK stock market has had a good run over the last year or so, I’m still seeing plenty of attractive investment opportunities today. Here’s a look at three UK shares I’d buy right now.
A top UK stock to buy now
The first UK stock I want to highlight is Gamma Communications (LSE: GAMA). It’s a leading provider of ‘unified communication’ solutions. Unified communication incorporates voice and video calling, video conferencing, messaging, team collaboration, file sharing, and more. I see Gamma as a great way to play the remote working boom.
This week, Gamma’s share price has fallen on the back of the company’s half-year report. The thing is, the H1 results were actually pretty good. For the period, revenue was up 23% year-on-year while adjusted earnings per share were up 30% year-on-year. The dividend was hiked 13%.
Looking ahead, Gamma said it was “optimistic” about future growth prospects. Given these strong results, I see the share price pullback as a buying opportunity.
One risk to consider here is that the company’s valuation is still quite high. Currently, Gamma sports a forward-looking P/E ratio of about 34. But I’m comfortable with that and I think this stock has a lot of growth potential.
Another British stock that strikes me as a ‘buy’ right now is online fashion retailer ASOS (LSE: ASC). Its share price has taken a huge hit recently (it’s fallen from £60 to £34 in six months) and I think the share price dip’s unjustified.
There are a couple of reasons ASOS’ share price has tanked recently. One is that investors expect growth to slow as the world reopens. Another is that several brokers have reduced their price targets for the stock.
In the near term, the slower growth and lower broker targets could continue to impact the share price. I’m looking to the long term here. however. In the long run, I expect the company’s revenues and profits to expand significantly, pushing its share price up.
ASOS shares currently trade on a multiple of just 22 times this financial year’s forecast earnings. For ASOS, that’s a very low valuation, so don’t think the shares will be this cheap for long.
A FTSE 100 growth stock
The third UK stock I want to highlight is London Stock Exchange (LSE: LSEG). It’s a leading financial markets infrastructure and data company. This year, LSEG shares have underperformed and I think this has created a good buying opportunity.
One reason I’m bullish on London Stock Exchange is that the company recently acquired financial data powerhouse Refinitiv. The aim is to transform itself into a one-stop shop for financial data and analytics. I think this is a smart strategy. Going forward, the demand for high-quality data and analytics is likely to rise.
One risk here is that the Refinitiv acquisition may not go as planned. For example, integration costs could be higher than originally anticipated. It seems this issue is currently worrying investors.
However, I think this risk is factored into the share price now. With the stock currently trading on a forward-looking P/E ratio of under 28, I think it’s a good time to be building a position.
Edward Sheldon owns shares of ASOS, Gamma Communications, and London Stock Exchange Group. The Motley Fool UK has recommended ASOS and Gamma Communications. 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.