3 UK shares I think can grow in 2022

Our writer selects three UK shares he would consider buying now for his portfolio because he reckons they have good growth prospects for 2022.

| More on:

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.

Although the stock market had a good run in 2021, I reckon there could be further gains for many shares in 2022. Below are three shares I would pick for my portfolio in 2022 because I like their growth prospects.

Tarnished brand but a solid business: Boohoo

To say that online retailer Boohoo (LSE: BOO) has had a hard time lately is putting it mildly. The shares’ prices sat 68% below where they were a year ago, at the time of writing this article earlier today.

5 Stocks For Trying To Build Wealth After 50

One notable billionaire made 99% of his current wealth after his 50th birthday. And here at The Motley Fool, we believe it is NEVER too late to start trying to build your fortune in the stock market. Our expert Motley Fool analyst team have shortlisted 5 companies that they believe could be a great fit for investors aged 50+ trying to build long-term, diversified portfolios.

Click here to claim your free copy now!

Clearly there are risks here. The company’s supply chain has come under critical scrutiny, potentially reducing the brand’s appeal to its customers. Cost inflation, supply chain problems and unexpectedly high return rates led the company to issue a profit warning last month.

But I think the Boohoo share price may now be focussed on the risks while ignoring the opportunities. It trades at 15 times last year’s earnings. That seems cheap given its strong growth prospects. While this year’s earnings may be lower, I see continued opportunities for the firm to expand its business, which last year saw revenues increase 41%. I would consider buying it for my portfolio now.

Strong business growth outlook: S4 Capital

Another company whose shares have taken a tumble lately is digital ad agency holding group S4 Capital (LSE: SFOR). Its shares are down 39% from their September high.

The S4 Capital share price is now within 1% of where it stood a year ago. I regard that as a bargain given the strong growth in the company since then. Last week it reiterated its expectation of doubling revenues and profits organically within a three-year period. It will likely grow further by bolting on acquisitions, another one of which was announced last week.

The S4 share price tumbled after it warned of higher costs to integrate acquisitions. That risks diluting profit margins. But last week the company tackled investor concerns and said that it is targeting “an improvement in the operational EBITDA margin back towards previous levels“. S4 is working hard to restore shareholder enthusiasm. I see strong growth potential and tightened cost control as possible drivers to push the share price higher in 2022.

UK shares in recovery mode: Card Factory

Retailer Card Factory (LSE: CARD) may help its customers celebrate special moments but it has had limited cause for celebration itself lately. A trading statement last week hurt the shares, but the company actually upgraded its revenue expectations for the year. It expects sales to grow strongly, from over £360m last year to more than £600m within five years.

Profits before tax for last year are expected to be £7m-£10m. That compares to £65m before the pandemic. But it shows that the company is in recovery mode. With the expected sales growth, I think it can surpass pre-pandemic earnings in years to come.

Supply chain risks could hurt the company if increased shipping costs damage profit margins. The shares have risen 46% over the past 12 months. I think a return to profit and plans for strong revenue growth could propel the shares higher in the coming year. I would consider adding Card Factory to my portfolio.

One Killer Stock For The Cybersecurity Surge

Cybersecurity is surging, with experts predicting that the cybersecurity market will reach US$366 billion by 2028more than double what it is today!

And with that kind of growth, this North American company stands to be the biggest winner.

Because their patented “self-repairing” technology is changing the cybersecurity landscape as we know it…

We think it has the potential to become the next famous tech success story.

In fact, we think it could become as big… or even BIGGER than Shopify.

Click here to see how you can uncover the name of this North American stock that’s taking over Silicon Valley, one device at a time…

Christopher Ruane owns shares in S4 Capital. The Motley Fool UK has recommended Card Factory and boohoo group. 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.

More on Investing Articles

Arrow symbol glowing amid black arrow symbols on black background.
Investing Articles

An under-the-radar FTSE 100 stock to combat stagflation fears

As the share price of this blue-chip FTSE 100 stock falls below Covid-levels, why I added it to my portfolio.

Read more »

Man smiling and working on laptop
Investing Articles

This stock market sell-off could be my buying opportunity of the decade

The market sell-off has been brutal, but this Fool thinks it offers him a compelling opportunity to make big money.

Read more »

Typical street lined with terraced houses and parked cars
Investing Articles

After falling 60%, is the Ocado share price a bargain?

The Ocado share price has fallen heavily in the past year. But our writer is still not buying it for…

Read more »

Hedge shaped as the pound symbol inside a glass piggy bank
Investing Articles

A question investors need to ask about the Woodbois share price

The Woodbois share price has declined a little from its peak in early May. Does that mean I should buy…

Read more »

Young woman working at modern office. Technical price graph and indicator, red and green candlestick chart and stock trading computer screen background.
Investing Articles

3 value stocks I’d buy right now

Roland Head thinks market conditions could favour value stocks over the coming year. He’s found three he’d like to buy…

Read more »

Young woman working at modern office. Technical price graph and indicator, red and green candlestick chart and stock trading computer screen background.
Investing Articles

These 5 FTSE 100 shares have crashed in 2022. I’d buy one now

These five FTSE 100 shares have plunged in value over the past six months. But I believe one of these…

Read more »

man in shirt using computer and smiling while working in the office
Investing Articles

Is Scottish Mortgage Investment Trust now a bargain growth stock?

The Scottish Mortgage Investment Trust share price has plummeted nearly 50% from its 52-week high. Is this a great opportunity…

Read more »

A couple celebrating moving in to a new home
Investing Articles

2 key stock picks for reliable passive income

I’m looking at stocks that can deliver reliable passive income to complement my growth picks, and I think I’ve found…

Read more »