JD Sports Fashion was the best performing FTSE 100 stock of 2019. It has also shown an impressive comeback since the stock market crash. Its share price is up almost 2.5 times from the lowest it touched. In other words, if I had invested £1,000 in the stock in 2019, it would have been one of the best UK shares to buy, irrespective of the stock market crash. I don’t think this is a coincidence.
Best UK shares are in growing markets
The UK health and fitness industry is growing, and will continue to do so in the foreseeable future. According to research from consultant Deloitte, the UK’s fitness market is the second largest in Europe, after Germany. It’s also growing at 4%+ rates. Much like JD Sports Fashion, other companies in the segment will benefit from the trend. We at the Motley Fool like long-term investments in quality companies, and this sector offers opportunities of exactly that kind, making them among the best UK shares to buy today.
Frasers Group is expanding
One example is Frasers Group, which used to be Sports Direct. Unlike JD, its share price hasn’t risen rapidly, but it has shown gains. Its financials don’t raise any red flags either. Its profit growth is inconsistent but it has remained profitable for a while now. I reckon its upcoming results will be weak, given the current Covid-19-driven circumstances, but that’s exactly the time to buy.
I think some of the best UK shares to buy are those that are down because of circumstances beyond their control. That is, if they are likely to come out ahead over time, given their market prospects and performance. I think this is the case for FRAS. It has reportedly bid for DW Sports, which owns gyms and sports stores, and recently went into administration.
The Gym Group is a small cap to consider
Another example of potentially one of the best UK shares to buy is The Gym Group. This small-cap stock operates 175 gyms across the UK. In the low-cost gym category, its market share is second only to PureGym. Much like Frasers Group, in the short-term its performance will be impacted by Covid-19. But I’m still bullish on it for three reasons.
One, it has managed to tide well over the lockdown by raising funds. Two, its revenue growth over time has been robust. In 2019 alone, its revenue grew by 23.6%. And three, its share price has bounced back after the market crash, indicating investor faith in GYM. The debt it has accumulated is a tad worrisome, especially since it is loss-making right now. But with gyms now open again, I think it can start the recovery process. I think it’s likely to be a long-term success story and one of the best UK shares to buy today for my Stocks and Shares ISA.
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Manika Premsingh owns shares of JD Sports Fashion. The Motley Fool UK has recommended The Gym Group. 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.