Some shares have been doing well in recent months – but many have not. Just because a share price falls a long way does not necessarily mean that the underlying business is any worse. For example, I am eyeing a trio of UK shares to buy now for my portfolio. In each case I think the strong business performance is not reflected by the tumbling share price. That is why I see a potential buying opportunity for my portfolio.
JD Sports
Sudden management changes are rarely popular with investors. That is just one of the reasons the past year has seen the JD Sports (LSE: JD) share price tumble 36%.
But set against that price movement are the company’s latest annual results, which came out this week. JD Sports saw record turnover and profits. The company raised its annual dividend by an impressive 21%. It also said that it expects revenues and profits this year to match those from last year. That is despite risks to the company, such as an economic slowdown in key markets that could lead to lower revenues.
Given the strong performance and upbeat outlook, I think the slump in the JD Sports share price now looks overdone. I see it as a buying opportunity for my portfolio.
Howden Joinery
Another share that has seen its price plummet over the past 12 months is Howden Joinery (LSE: HWDN). It has fallen 27% in that period. The company now trades on a price-to-earnings ratio of 11 and has a dividend yield of 3.2%.
But like JD Sports, Howden’s business performance has been strong. Last year’s revenues grew 35% compared to the prior period. Profit more than doubled, to £390m. Like JD Sports, this was a record set of financial results. That has not been enough to satisfy the City. The risk of a slowing economy cutting demand for building products is worrying investors.
I see the long-term growth story at Howden as attractive. I think its network of depots and relationship with tradespeople give it a sustainable competitive advantage. I reckon the current share price is a bargain and would consider adding the company to my holdings.
Cranswick
A third big faller over the past year is food producer Cranswick (LSE: CWK). Its shares have fallen 21% over the past period.
What about its business performance? In its prelim results last month, Cranswick announced revenues up 6% on the prior year and profits up 12% in the same period. Like the two shares above, this was a record performance. The company rewarded shareholders with an 8% increase in its annual dividend. That means Cranswick has now raised its payout for 32 years on the trot.
Past performance is no guarantee of what comes next. Rampant cost and wage inflation could hurt profits at food producers like Cranswick. But the company is a well-oiled machine with a proven business strategy and robust customer demand. I would consider adding its shares to my portfolio.
UK shares to buy now
All three of these businesses delivered record revenues and profits last year. Yet all of them have seen their share prices slide by at least a fifth in the past year. That is why I see them as UK shares to buy now for my portfolio.
