3 UK shares I think could smash the market in 2024!

Our writer details three UK shares she feels could be some of the best performers in 2024 and explains why!

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Three UK shares I reckon could soar in 2024 are B&M European Value (LSE: BME), Rolls-Royce (LSE: RR.), and Ashtead (LSE: AHT). Here’s why!

What do they do?

In the famous words of Jay-Z, “Allow me to reintroduce myself”.

B&M is a discount retailer that has experienced great organic and acquisition-led growth in recent years.

Rolls-Royce is perhaps the best known of the three stocks and one of the biggest aerospace businesses in the world.

Last, but certainly not least, Ashtead is an equipment rental firm servicing the construction industry and, like B&M, has experienced tremendous growth in recent years.

My investment case

B&M has captured a great market share, especially in recent years, as the focus and popularity of budget products and discount retailers has increased. Recent macroeconomic volatility and a cost-of-living crisis have boosted B&M nicely in terms of share price, performance, and returns. This could well continue as there are no signs of volatility slowing. Plus, the business is looking to grow its international presence, which could help it climb too.

B&M shares look good value for money on a price-to-earnings (PE) ratio of 16 and offer a dividend yield of 2.6%. However, I’m aware that dividends are never guaranteed.

Rolls-Royce seems to be climbing out of the mire it found itself in during the pandemic period. A shrewd transformation strategy has seen it paying down debt, making a profit, and potentially turning a tricky corner. I reckon it can continue this especially as the aerospace market is burgeoning and the engine maker does have a stellar reputation in terms of its products combined with a global footprint.

Rolls-Royce shares have soared since mid-2023 but I reckon there’s still some way to go!

It’s worth remembering that renting equipment is more cost-effective for construction firms, which has helped Ashtead grow. I reckon 2024 could be a big year for the business, especially in the US, where it makes most of its money, due to a potentially lucrative infrastructure bill that could help performance and returns climb.

Ashtead shares look good value for money on a P/E ratio of 14 and offer a dividend yield of 1.5%, as I write.

Risks and my position

B&M’s acquisitions have been great to date. However, there’s always a chance one poor choice in acquiring a new business could be detrimental. Failed acquisitions are costly to dispose of and can hurt sentiment, balance sheets, and returns.

Despite Rolls-Royce’s recent resurgence, the business does still have a lot of debt to pay down. This is tricky in a higher interest environment as debt is costlier to service. This increased cost can hurt growth plans going forward.

Continued economic turbulence presents a short to medium-term risk for Ashtead’s performance. Construction has slowed due to recent volatility and therefore demand for rental equipment could dwindle too. This could hurt performance and returns.

To conclude, I already own B&M shares and may look to buy some more soon. Also, as soon as I have some investable cash, I’ll look to add some Rolls-Royce and Ashtead shares to my holdings as well.

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 assessed. Consider taking independent financial advice.

Sumayya Mansoor has no position in any of the shares mentioned. The Motley Fool UK has recommended B&M European Value and Rolls-Royce Plc. 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.

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