Now could be an excellent time to start searching for the best UK shares to buy. After all, with the stock market taking quite the tumble over the last couple of months, there are a lot of great businesses currently trading at a significant discount. At least, that’s what I think.
So let’s explore two companies that I’m thinking of adding to my portfolio this month with £1,000.
The leader nobody’s heard of
The video game industry enjoyed quite the tailwind during the height of the pandemic. With everyone stuck at home, many turned to this source of entertainment to pass the time. Yet it seems the industry’s growth has continued, even with (almost) everyone heading back to the office.
A growing market opportunity breeds competition. And for most game development studios, that could be a sign of trouble ahead. But not for Keywords Studios (LSE:KWS). And it’s one of the main reasons why it’s on my list of UK shares to buy now.
As a reminder, this is a services company that provides the picks & shovels to leading development studios such as Activision Blizzard and Microsoft. With the revenue stream not exposed to the risk of a title flop, Keywords is in a uniquely strong position. Although there could be notable threats on the horizon. With AI getting smarter, player testing and translation services may soon be a thing of the past, eliminating a good chunk of the group’s revenue stream.
That’s obviously a significant long-term threat. But with income originating from plenty of other services such as 2D & 3D asset creation, programming, and audio FX, I believe the group can adapt. In the meantime, the company is delivering double-digit growth. And yet the share price is down by nearly 20% in the last seven months. That, to me, looks like an excellent buying opportunity for my portfolio.
UK shares to buy now for the digital revolution
Another not-so-well-known business in the British market is Kainos Group (LSE:KNOS). This firm provides a host of support services to companies as well as governments that all aim to digitalise operations. Kainos is the brains behind the digitalisation of patient files in the National Health Service. And they’re also enabling The National Archives to transition its entire operation into the digital world.
Much like Keywords Studios, Kainos’s share price has endured quite the tumble in recent months. In fact, since the start of 2022 alone, it’s fallen by almost 25%. And that’s despite delivering 33% growth in its top-line revenue.
Kainos is not without its risks, of course. With large chunks of the British government relying on its software solutions, any breach in cyber security could have dire legal and financial consequences. Nevertheless, I’m personally willing to take this risk, given the growth opportunity and the reduced price tag. That’s why Kainos is on my personal UK shares-to-buy list.
