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Best UK shares to buy now? I’d consider these

The spring stock market crash has produced some decent-looking cheap shares. But not all the best UK shares to buy now are giants in the FTSE 100. I like the look of many companies with smaller market capitalisations too, such as media and entertainment technology solutions provider Amino Technologies (LSE: AMO).

This company looks well-placed in its markets

The company offers products and services aimed at helping media companies deliver video and TV content. It does so via two operating units. Amino Communications provides TV-centric solutions. And 24i focuses on streaming and Over-The-Top (OTT) “experiences”.

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OTT means streaming services offered directly from the internet and ‘over’ cable, satellite and traditional broadcast platforms. As such, Amino Technologies is involved in the forefront of where the video market appears to be going.

One of the things I admire about the company is its small net cash position of just over $2m. Indeed, there’s little debt on the balance sheet. And I reckon that’s a good platform to build growth upon. However, although today’s half-year results report reveals a 10% increase in revenue year-on-year, the shares are weak today.

A possible reason for the share-price dip is that adjusted earnings per share fell by 21%. And the interim dividend is toast. Indeed, in the short term, the pandemic has presented the firm with challenges. But Amino Technologies is one of the many businesses that managed to mitigate the effects of the virus and keep trading through the crisis when the lockdowns hit economies.

Driving higher-quality earnings

In January 2019, the company kicked off a programme aimed at improving the quality of earnings through a software-led strategy. And in the six-month period to 31 May, 26% of revenue came from software and services, up from 10% a year earlier. On top of that, the firm reckons it maintained margins in its devices business, helped by selling software to device customers. The directors reckon the strategy has delivered a “resilient” performance since the outbreak of Covid-19.

Looking ahead, non-executive chair Karen Bach said in the report the directors think that “Amino has the right foundation to meet its goals”. And they expect the firm to “make further progress in the second half of the year”. MeanwhileCity analysts seem optimistic about an earnings bounce-back next year, and I’m encouraged by the top-line growth. To me, Amino Technologies is a well-financed growth candidate trading through the temporary set-back brought on by the pandemic. And the share price reflects the short-term difficulties. Indeed, the valuation looks modest with the forward-looking earnings multiple for the trading year to November 2021 running just below 11.

I’m tempted to buy a few shares and hold for the long-term growth potential. But if you like the look of Amino Technologies, you may also warm to the attractions of Oxford Metrics. The company provides software for infrastructure asset management and motion measurement. I reckon the business has a bright future and the stock strikes me as another strong growth proposition suffering short-term challenges because of Covid-19. I reckon these really could be two of the best UK shares to buy now. Time will tell!

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Kevin Godbold owns shares in Oxford Metrics. 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.

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