While some shares have had a banner 2022, many have not. That offers some potential bargains for my portfolio. Here are three UK shares that I would buy for my portfolio now if I had spare cash to invest. Each one has fallen 40% or more in 2022, so I will get a lot more for my money than if I had bought them at the start of the year.
JD Sports
In recent months, shares in retailer JD Sports (LSE: JD) have had a positive streak, increasing 40% in under two months.
Despite that, the JD Sports share price remains 42% lower than it was at the start of the year. Over a 12-month period, the decline has been 45%.
I think the recent recovery reflects a shift in investor sentiment, with some in the City now feeling the shares had been beaten down too much for a company with such a strong and proven business model. JD expects to record a headline profit before tax and exceptional items for the year equal to last year’s all-time record.
With its large customer base, strong brand and multinational reach, I think JD Sports has the makings of a business that can go from strength to strength in coming decades. Consumer spending slowing is a threat to sales, while cost inflation may hurt profitability. But I continue to be positive about the outlook for the company.
Jupiter
2022 has been an awful year to be a Jupiter (LSE: JUP) shareholder in many ways, with the shares more than halving in price. They now stand 47% below their level a year ago.
However, I think there have been some bright spots too. Jupiter maintained its large dividend, although that is unlikely to be the case next year. New management set out a fresh strategy and also detailed plans to put the dividend on a more financially sustainable footing. In the long term I think that should be good for the health of the firm. Meanwhile, a share buyback suggests management confidence. It could also help boost earnings per share as the number of shares in circulation falls.
There are still large risks here, from a decline in assets under management to the weakening appeal of the Jupiter brand among some investors. Management has a lot of work to do. But I see long-term strengths at one of the country’s best-known asset managers.
Scottish Mortgage
My third pick would be the Scottish Mortgage Investment Trust (LSE: SMT). These UK shares have fallen 41% so far in 2022, making for a 47% decline over the past 12 months.
As an investor in a wide range of tech firms like Tesla and MercadoLibre, the asset value of the trust has been hurt badly by falling share prices in the tech sector. I see a risk that that could continue in the coming months and possibly longer.
From a long-term investing perspective, however, I continue to like the trust’s proven ability to find winning, innovative business models at an early stage then benefit from their growth by investing in them. I continue to see long-term potential from this approach. I would buy Scottish Mortgage shares for my portfolio if I had spare cash to invest.
