What are the best UK shares to buy right now? Different people will answer this question differently. So, I present in this article the three FTSE 100 shares with the highest percentage of analyst buy ratings. But a simple percentage won’t be enough for readers of the Motley Fool UK, so read on to discover why I think analysts are tipping these three UK shares for success and see if you agree.
Is Informa the best UK share to buy?
The coronavirus crisis shut Informa‘s (LSE: INF) events business. As a result, its share price is 55% lower than it was a year ago. However, investors may have overlooked the importance of the 35% of Informa’s revenues that come from service subscriptions, which include business intelligence and academic journals.
Those subscriptions buy time for the events business to get back on track, and there are signs this is happening. 90% of analysts recommend buying Informa, while only 5% recommend selling the stock. I think they are forecasting Informa to return, albeit slowly, to its pre-coronavirus growth profile.
In the five years before the coronavirus struck, Informa was growing its revenues at 24% per year on average. Net income increased from £171.4m to £225m over the same period. If Informa starts performing like this again, then its share price should be much higher in the future than it is now.
The share price of Persimmon (LSE: PSN), a house builder, is 17% higher than it was a year ago. However, Persimmon shares still sit 20% below their pre-coronavirus highs, which suggests shares could climb higher. Analysts would certainly agree since 89% of them recommend buying Persimmon, up from 82% in May of this year.
Since work at Persimmon’s sites was allowed to restart in mid-May, activity has rebounded sharply. Sales reservations are higher since the restart compared to the same period a year ago, and sales prices appear to be holding firm. With interest rates set to remain low, and the banks being in relatively good shape (compared to the great financial crisis) mortgage availability should be good, which augurs well for Persimmon. If the economy does suffer in the coming months, then Persimmon has a healthy balance sheet that should see it through.
Finally, we have Avast (LSE: AVST), a security software provider. People have been spending more time online since the pandemic took hold. Avast has seen demand spike for its products, which protect against cybercrime.
Avast emerged from a scandal over data selling in January. It sold off the business unit at the heart of the fuss in a bold step that has reassured users and investors. The share price climbed steadily until the market crash but has since pushed on to sit 71% above where it was a year ago. So why are 87% of analysts recommending Avast as a share to buy?
The shift to online working is unlikely to retrace completely, which supports higher continuing product sales. Avast continues to launch new products, in particular, BreachGuard, which helps users control their data on the web in both its light and dark corners. Greater online use is coinciding with greater awareness of its dangers, and Avast is ready to serve the increased demand. It gets a place in my top three UK shares to buy right now.
James J. McCombie 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.