UK shares to buy now: 3 big fallers I’d snap up

Our writer thinks this trio of strong business performers could be attractive UK shares to buy now for his portfolio.

| More on:
Happy young female stock-picker in a cafe

Image source: Getty Images

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.

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 considered so you should consider taking independent financial advice.

Christopher Ruane owns shares in JD Sports. The Motley Fool UK has recommended Howden Joinery 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

Middle-aged white man wearing glasses, staring into space over the top of his laptop in a coffee shop
Investing Articles

With a spare £500 I’d buy these UK shares

A financial services giant, a FTSE 250 distributor, a FTSE 100 tech stock, and a gold miner are on the…

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

Should I buy this defensive FTSE 100 stock for growth and returns?

This Fool takes a closer look at a FTSE 100 stock to see if it could boost his holdings via…

Read more »

Young female analyst working at her desk in the office
Investing Articles

I robbed Mr Market of this cheap FTSE stock!

This FTSE 250 stock has crashed by almost 30% in six months. But I recently bought into this battered business…

Read more »

Mature people enjoying time together during road trip
Investing Articles

3 reasons I’m backing NIO shares to soar!

NIO shares have bounced up and down this year. But where will the share price go next? My bet is…

Read more »

Portrait of elderly man wearing white denim shirt and glasses looking up with hand on chin. Thoughtful senior entrepreneur, studio shot against grey background.
Investing Articles

Up 300%, is the Hurricane Energy share price an opportunity too good to miss?

This Fool looks at why the Hurricane Energy share price has soared in the past 12 months. Should he buy…

Read more »

Middle-aged white man pulling an aggrieved face while looking at a screen
Investing Articles

The BT share price crashes 20% in a month. Buy now?

The BT share price has crashed by almost a fifth since coming close to £2 on 12 July. After this…

Read more »

A pastel colored growing graph with rising rocket.
Investing Articles

How I’d invest £1,000 in growth shares today to target £5,000 in a decade

Our writer reckons he could do well by choosing the right growth shares today and holding them in his portfolio…

Read more »

Shot of a senior man drinking coffee and looking thoughtfully out of a window
Investing Articles

How passive income from stocks can speed up early retirement

By investing patiently over the years, buying quality shares has given me enough passive income to retire 10 or even…

Read more »