These two UK shares are all set to update the market in December. I’d buy them in my Stocks and Shares ISA today and this is why.
Demand for IMImobile’s (LSE: IMO) shares ballooned during late summer and early autumn but has trended lower more recently. I’d use recent share price weakness as an opportunity to engage in some choice dip buying. And particularly with the UK share’s next financial update around the corner. Results for the six months to September are scheduled for Monday, 7 December.
IMImobile is an expert in the field of cloud communications software and mobile messaging. This puts it in great shape to ride the twin themes of rising flexible working following the Covid-19 pandemic and the rise of the mobile phone. The IT giant allows blue chips in a broad range of sectors from Barclays and Hermes, to nPower and GlaxoSmithKline, to keep in touch with customers through their handsets.
Back in September IMImobile said that it had enjoyed “continued momentum across our core sectors” since its update of early July. It added that volumes and activity within sectors hit hardest by Covid-19 like retail and healthcare had also shown “significant recovery”. This all bodes well for that upcoming trading statement next week, clearly. Some significant share price gains could be just around the corner.
Another UK share I’d buy in my ISA
For a firm with classically cyclical operations Ashtead Group’s (LSE: AHT) share price performance has been phenomenal. By early summer it erased all of the share price falls endured during the stock market crash of late February and early March. And just this week it rose to its most expensive ever above £32 per share.
Rental equipment supplier Ashtead — which provides hardware on construction sites, at entertainment events, for facilities maintenance and for emergency response — has naturally seen revenues slip amid Covid-19 lockdowns in 2020. Still, the market has been encouraged by the FTSE 100 company’s resilience in a challenging year.
The company said in September that, assuming there were no additional waves of Covid-19 leading to market shutdowns, revenues on a constant currency basis would only be down by “mid to high single digits” for the financial year ending April 2021.
There was more good news to come too. The pandemic has caused balance sheets to come under severe pressure. Ashtead said that its leverage fell to 1.8 times in the first fiscal quarter from 1.9 times a year earlier. Record free cash flow for the May to July period drove this improvement.
Clearly the outlook for the North American construction market, an arena from which Ashtead generates almost all profits, remains uncertain. But it looks like the FTSE 100 business is past the worst that Covid-19 can throw up. I’m expecting another positive set of trading numbers when second-quarter financials are released on Tuesday, 8 December. I already own this UK share in my ISA and am tempted to buy more ahead of that release.
Royston Wild owns shares of Ashtead Group. The Motley Fool UK has recommended Barclays and GlaxoSmithKline. 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.