Best British shares for December

We asked our freelance writers to share their best British shares for December, including Safestore, Restaurant Group and Auto Trader.

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.

Light trails from traffic moving down The Mound in central Edinburgh, Scotland during December

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We asked our freelance writers to share the best British shares they’d buy this December. Here’s what they chose:

Christopher Ruane:  Safestore

A quietly outstanding company I am eyeing for my portfolio is Safestore (LSE: SAFE). The self-storage operator continues to turn in strong financial results. Diluted earnings per share in its first half rose 75% and the dividend was increased 27%, compared to the equivalent prior period.

A simple business model, growing demand for storage space and its well-established brand mean that Safestore remains attractive to me. One risk is competitors pushing down profit margins in the industry. But I would be happy to tuck Safestore shares away in my portfolio in December and hold them for years.

Christopher Ruane does not own shares in Safestore.

Dan Appleby: Auto Trader

Auto Trader (LSE: AUTO) is the UK’s largest digital marketplace for vehicles. The share price has surged recently, and I expect this to continue in December.

The company has a wide economic moat (to steal a Warren Buffett phrase) from its extensive network effect across the UK. Looking ahead, recent successful price increases and new product launches should boost growth in the months ahead.

However, global supply chain issues may limit the stock of cars listed on Auto Trader’s website. The company has navigated this well until now, so for me, the stock is a buy.

Dan Appleby owns shares in Auto Trader.

Rupert Hargreaves: Restaurant Group

In December, I would buy shares in Wagamama owner Restaurant Group (LSE: RTN) for my portfolio as a recovery play. 

According to the company’s latest trading update, sales at its casual eateries are already outperforming the market. 

As we move into the critical Christmas trading period, I think the company should continue to see further growth. This should help support Restaurant Group shares. 

That is assuming there are no further coronavirus restrictions announced before the end of the year. This is probably the most significant risk hanging over the company right now. 

Rupert Hargreaves does not own shares in Restaurant Group.

Dylan Hood: HSBC

Amongst my best shares for December are HSBC (LSE: HSBA) — at the time of writing, HSBC shares are trading at 440p. This is over 25% less than its pre-pandemic level, offering great room for growth.

What’s more, the stock has generated 16% year-to-date returns. I believe this growth will continue regardless of the UK economy’s direction. If interest rates remain low, then increasing growth will help HSBC through increased lending. If rates rise, then the bank will be able to charge more on the loans it gives out.

Therefore, I think HSBC offers a good long-term addition to my portfolio.

Dylan Hood does not own shares in HSBC.

Nathan Marks: Unilever

Unilever (LSE:ULVR) is one of the few constituents of the FTSE 100 that looks likely to end 2021 in the red. Input cost inflation has strained profit margin expectations. However, I believe Unilever’s portfolio of household name brands have pricing power to pass inflationary costs on to customers.

The share price is down over 13% YTD at the time of writing, creating an attractive yield approaching 4%. 2021’s challenges will likely persist in 2022 but an astounding 2.5bn people use Unilever’s products daily. I see this as an excellent opportunity to buy a quality business at a discount.

Nathan Marks does not own shares in Unilever.

Edward Sheldon: JD Sports Fashion

My top stock for December is JD Sports Fashion (LSE: JD). It’s a leading retailer of athletic footwear and clothing.

There are a few reasons I’m bullish on JD right now. One is that in the US, major retailers are seeing strong growth at present. In November, both Macy’s and Kohl’s posted better-than-expected earnings and raised their full-year guidance. This is good news for JD, which has hundreds of stores across the US.

Another is that the company looks set to benefit from the shift to more casual clothing and footwear.

There are risks to consider, of course. One is the fact that major brands such as Nike are now going direct-to-consumer.

Overall, however, I think the risk/reward proposition here is attractive right now.

Edward Sheldon owns shares in JD Sports Fashion.

Kevin Godbold: Next

In November, retailer Next (LSE: NXT) posted cracking third-quarter results. However, the directors cautioned the fourth quarter would likely see lower sales.

Nevertheless, the guidance is for full-price sales to rise by 10% in the fourth quarter. And that’s despite pent-up demand likely declining. The directors said stock availability has “improved” but “remains challenging”. And the delays in the supply chain are being worsened by labour shortages. However, strong demand is offsetting stock limitations.

These are challenging times for Next. But the business looks fighting fit for a post-pandemic world and it’s one of my best shares to buy for December.

Kevin Godbold has no position in Next shares.

Paul Summers: Games Workshop

The relationship between fantasy figurine maker Games Workshop (LSE: GAW) and some of its followers has turned rather icy of late following the FTSE 250 member’s efforts to protect its intellectual property and stop fans from making animations featuring its settings and characters. The backlash, coupled with recent news of higher freight costs, means the shares have fallen almost 20% in 2021 at the time of writing.

I think this drop is overdone. Games Workshop remains a quality business with a dominant hold on a niche market. Considering the festive shopping season and the potential for colder weather/Covid-19 to keep people indoors, I reckon the stock could recover strongly in 2022. Half-year numbers are due mid-January.

Paul Summers has no position in Games Workshop

Royston Wild: Brickability Group 

I’d buy Brickability Group (LSE: BRCK) ahead of what could be an exceptional half-year trading update on Wednesday, 1 December. The former penny stock certainly impressed me in mid-October when it said like-for-like sales of its bricks between January and June were up 54% and 31% compared with the same periods in 2020 and 2019 respectively. 

I’m fully expecting demand for Brickability’s building materials to have remained strong in more recent months, too, thanks to the impact of low interest rates on new home demand. A word of warning, though: Brickability’s meaty forward P/E ratio of 22 times could prompt its share price to slump if trading conditions suddenly deteriorate. 

Royston Wild does not own shares in Brickability Group.

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.

The Motley Fool UK has recommended Auto Trader, Games Workshop, HSBC Holdings, Nike, and Unilever. 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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