Has it been a good year or a bad year so far for the British stock market? Some UK shares have done well, some have done badly and some have not done much of anything at all! That is the nature of a market with thousands of companies listed on it.
What about the shares that have done well? The FTSE 100 index has hit new all-time highs in the first half of the year and is up about 6% so far in 2025. Some individual UK shares though, have done much, much better than that…
This share has surged
Take for example a share that is still a long way off the FTSE 100 average: ITM Power (LSE: ITM). Since the start of 2025, the renewable energy share is up by 123%.
Now, I take a long-term approach to investing and from a long-term perspective, ITM’s performance has been much less impressive. Indeed, the price of this UK share has fallen 71% over the past five years, even including this year’s strong performance to date.
Understanding the reasons for that can be helpful. For many years, ITM has had promising hydrogen energy technology. Over the past year, a far sharper commercial strategy has seen impressive shifts in its financial performance.
At the time of its first half results in January, revenues were up 74% year-on-year. Since then, it has raised its full-year guidance and announced a stream of impressive contract wins.
Hunting for future winners
The rapid share price rise makes me feel ITM currently offers me too little margin of safety. After all, it faces risks including a heavily reliance on a small number of clients and a business model that has not yet proven it can be profitable.
Still, it is one of the UK shares I think could do well in years to come. If the price hits a level where the risk-to-reward ratio feels appropriate for me, I will consider investing.
But ITM illustrates that some UK shares have done brilliantly so far this year. I expect some will also have a strong second half – and may perform well in years to come.
So what am I looking for? Whereas ITM is yet to prove it can be consistently profitable, my general preference is for companies that have. In short, to paraphrase Warren Buffett, I look for great companies selling at attractive prices.
One share I’ve been buying
That brings me to one of the UK shares I have bought in recent months: plant hire company Ashtead (LSE: AHT).
It plans to move its primary listing to the US, but will still trade on the London market. So far this year, Ashtead’s 12% share price decline puts it in the shade compared to the likes of ITM Power. Over five years though, it has grown 68%.
It is up an even more impressive 3,558% over the past decade. Few UK shares can come anywhere close to that sort of performance.
But past performance is not necessarily indicative of what may happen in future. An uncertain economic outlook in its key US market is a risk to Ashtead’s revenues and profits.
But I reckon Ashtead’s proven business model, large customer base and extensive base of well-stocked depots are all valuable advantages that make it worth considering.
