Thanks to the stock market taking quite a beating recently, there are plenty of fantastic top UK shares I’m considering buying right now. With £7,000 to spare, here’s my list of what I believe are the best buying opportunities for my portfolio today.
UK shares to buy now: digital transformation
The first business to have caught my eye is Kainos Group. The technology firm provides specialist services that help its clients digitalise and improve operational efficiency. Among its long list of customers are the National Archives and multiple UK government departments.
With such high-profile customers on its roster, any breach in cyber security could lead to expensive legal consequences. However, this is a risk worth taking, in my opinion.
With rising inflation and interest rates, margin pressure is widespread across industries. And looking at the latest trading update, this has already begun to drive demand for Kainos’s services in the right direction. That’s why Kainos is on my list of top UK shares to buy now.
UK electronics pick
While supply chain disruptions are wreaking havoc, demand for electrical components continues to rise. XP Power is one such company enjoying this tailwind. That’s why it’s on my UK shares to buy now list.
The group designs high-performance components for a variety of industries, including engineering, healthcare, and semiconductor manufacturing.
According to the latest trading update, the group’s order book has reached a record high of £260m. That’s obviously impressive and indicates a potential upcoming surge in revenue once supply chain disruptions are finally alleviated. But this build-up could also backfire if management cannot fulfil these orders. Personally, looking a the group’s track record, I remain confident that it will succeed, making this a risk worth taking, in my mind.
Investing in science
Scientific methodology can be found at the heart of all research and development. So why not invest in the company that makes it all possible? Judges Scientific is a designer and manufacturer of scientific instruments used across almost all industries, including the electric vehicle space.
A good chunk of its revenue is funded primarily by government grants and subsidies. And that does make the revenue stream susceptible to budget constraints during periods of economic downturn. However, in the long run, demand for its products isn’t going anywhere. At least, that’s what I think. Therefore, the recent price tumble could make this one of the best UK shares to buy now for my portfolio.
A young disruptor among my UK shares to buy now
There are countless financial service firms in the UK today. But I think Alpha FX manages to stand out from the crowd. This company provides currency risk management services to small- and medium-sized businesses. For any firm with international exposure, this is an essential process.
However, I find the firm’s recently-launched international payment network more exciting. Traditionally sending enterprise-scale transactions abroad is an expensive and time-consuming process – a problem Alpha FX seems to have solved.
The group is certainly not without its flaws. Forex trading is complicated, to put it mildly. And if management isn’t able to find talented analysts capable of making prudent decisions, it could result in a significant drop in financial performance.
Having said that, the group’s consistent track record of double-digit growth I feel makes this a risk worth taking. Hence why I think now is an excellent time to buy shares of this UK top pick.
A recovery play?
Sometimes the best UK shares to buy now are the ones beaten to a pulp. And, in my opinion, this seems to be the case for Frontier Developments. The video game developer had a rough year following a poorly-received game release and lower-than-anticipated sales. The end result was a drastic cut in revenue guidance that investors punished severely.
This is not an uncommon occurrence within the video game industry. And these risks come with the territory. But has the market over-reacted? I think it might have. Frontier has a reputation for providing content updates and fixing issues long after releasing a new game. And the underperforming sales of its Jurassic World Evolution 2 title are expected to reverse following the upcoming film release of Jurassic World Dominion.
The risk of another flop will always be there. But with the share price down 60% over the last 12 months, these seemingly short-term problems appear to have created what I believe could be a brilliant buying opportunity for my portfolio.
A future king of digital advertising?
Another business to have been slammed by unimpressed shareholders is dotDigital. The tech stock provides a cloud-based marketing platform that automates advertising campaigns. Most of the recent lacklustre share price performance can be attributed to a slowdown in growth. But just like Frontier Developments, this might have been an over-reaction.
Looking deeper into the numbers reveals the average revenue per user has continued to climb by double digits, up to £1,422 per month versus £1,196 in 2021 and £715 five years ago. I think it’s fair to say that despite the headwinds over the past year, management knows how to get customers to spend more. And, in my experience, this is a common trait among the best UK shares to buy now.
There are, of course, risks. With data being at the heart of the marketing ecosystem, regulatory changes surrounding internet privacy could disrupt the group’s future revenue stream. But dotDigital had already gone through something similar when GDPR was introduced in Europe and emerged unscathed. That’s why I feel this is a risk worth taking, given the relatively low share price and continued underlying performance of the business.
Shares of a UK pandemic success business to buy now
Lockdown restrictions in 2020 wreaked havoc across almost all industries. But it also created new opportunities and trends that continue to persist, even now that Covid-19 is no longer dominating most people’s lives.
A key requirement for any successful business is a talented workforce. But when social distancing prevents large groups of individuals from meeting up, training staff becomes difficult. This is a problem that Learning Technologies Group solved with its digital learning solutions.
Investors have justifiable fears that demand for the group’s services will naturally decline now the pandemic is slowly coming to a tolerable level. And these concerns are clearly reflected in the underwhelming stock performance in recent months.
However, looking at the latest results, it seems the complete opposite has happened. Why? Because the revenue stream actually doubled in 2021. Whether this growth can continue moving forward remains to be seen. Regardless, I feel the risk is worth the reward. Hence why these shares are on my list of top UK stocks to buy.
