Investing in individual shares has been the most effective way to play the UK stock market in recent years. By picking stocks, one could have potentially beaten the Footsie by a wide margin. Looking for UK shares to buy in February? Here are three to consider.
An attractive set-up
First up, we have banking giant HSBC (LSE: HSBA). This is my favourite UK bank as it’s global in nature and has significant exposure to high-growth markets.
The set-up here looks attractive right now, in my view.
For a start, the stock is cheap. Currently, the price-to-earnings (P/E) ratio is just eight.
Secondly, there’s an attractive dividend yield on offer. The dividend forecast for 2025 is 65 cents, which puts the yield at a high 6.4%.
Third, the shares are in a strong uptrend. One reason for this is that global banks may face less US regulation under the Trump Administration.
Of course, HSBC’s exposure to China is a risk in the years ahead. Its economy just can’t seem to get out of first gear.
Overall though, I think this stock has a lot going for it.
A Trump play
Another UK stock that could potentially do well while Donald Trump is in the White House is Ashtead (LSE: AHT). It’s a major player in the construction equipment rental business and has significant exposure to the US.
America is going to be doing a ton of building in the years ahead as Trump tries to turbocharge the country’s superpower status. So Ashtead’s construction equipment (which can be used to dig, drill, shift, power, etc.) should be in high demand.
For FY26 (the year ending 30 April 2026), analysts expect revenue and earnings per share growth of 6.3% and 13%, respectively. These forecasts are decent, but I wouldn’t be surprised if numbers come in higher (which could send the share price up).
This stock has experienced a pullback recently as the company advised that near-term earnings were going to be a little lower than previously expected. Further operational weakness in the short term is a possibility.
For long-term investors however, I think this is a good entry point. Currently, the stock trades on a forward-looking P/E ratio of 16, which is reasonable given Ashtead’s amazing long-term track record (it’s one of the best-performing UK stocks over the last 20 years).
A savvy buy
Finally, I like the look of IG Group (LSE: IGG) today. It operates one of the UK’s most popular financial trading platforms.
There are several reasons I’m bullish here. One is that I’m expecting plenty of volatility in the financial markets this year (which should boost trading activity).
Another is that the company just announced the acquisition of Freetrade (for a bargain price of £160m). I think this is a great buy as this investing platform is very popular.
As for IG’s financials, they look attractive to me. Looking at the forecasts for the year ending 31 May 2025, the stock currently trades on a P/E ratio of just 9.9 and offers a dividend yield of 4.7%.
It’s worth noting that IG operates in a competitive industry. So, a risk is that new trading/investment start-ups capture market share.
I like the risk/reward proposition at the current valuation though.
