Buying UK shares might not be on the priority list for many investors right today. Even though some of the best stocks to buy are trading at rock-bottom prices, concerns over the global economy are forcing large numbers of investors to remain planted on the sidelines.
This is a huge shame, in my opinion. The recent stock market crash allows brave investors to build a winning portfolio of UK shares at bargain-basement prices. Buying stocks at low prices allows you and me to boost the returns we make over the long run. Many of these top-quality shares are likely to soar in value over the next decade as the economic recovery kicks in.
With this in mind, here is an exceptional UK share that fell heavily during the stock market crash. I think it now looks too good to miss.
One of the best UK shares out there?
Bloomsbury Publishing (LSE: BMY) has all the tools to thrive many years into the future.
Its blockbuster Harry Potter franchise is as popular and dependable as ever. Sales of these books helped drive revenues at its consumer division 28% higher in the four months to June. But the evergreen appeal of Hogwarts’s favourite son isn’t the only reason to buy Bloomsbury. The small cap entered the high-growth digital academic resources arena a few years back and is investing heavily here to drive future profits. It estimated back in 2016 that university libraries have a budget of around £5bn, giving it plenty of business.
The Covid-19 outbreak has damaged Bloomsbury’s business in 2020 as bookshops were closed en masse. But City analysts reckon the subsequent earnings dip predicted for this financial year (to February 2021) will be a fleeting problem. Consensus suggests that this UK share will roar back from a 31% bottom-line reversal with a 12% rise in fiscal 2022.
Dividends to return
The number crunchers also expect that this bright outlook will encourage Bloomsbury, which has recently taken steps to reinforce its balance sheet, to reinstate the dividend and pay another meaty full-year reward. At current prices the publishing giant sports an inflation-mashing 3.6% dividend yield.
Bloomsbury’s share price has slumped around 25% since the start of the year, providing a brilliant buying opportunity in my book (no pun intended). The shares had doubled in value (up 102% to be exact) during the five years to the beginning of 2020.
With bookstores reopening I expect it to get back to doing what it does best: generating monster amounts of cash (thanks predominantly to Mr Potter) and paying big, big dividends. It’s easy to forget that Bloomsbury had hiked the annual dividend every year for almost 25 years prior to the croonavirus crisis.
Bloomsbury is one company I’d buy despite the prospect of a global economic downturn. The stock market crash means that there are many other top UK shares are too cheap to miss right now, too. It’s time to go shopping, I think.
Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.