Stock market crash: 2 bargain UK shares I’d buy in a Stocks and Shares ISA today

These two bargain UK shares could offer improving returns after the stock market crash, in my view. Buying them in an ISA could be a profitable move.

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The prospects for many UK shares continue to be uncertain after the stock market crash. Risks such as Brexit and coronavirus may weigh on investor sentiment over the coming months.

However, the share price falls of companies across the FTSE 100 suggest that there may be buying opportunities on offer for long-term ISA investors.

With that in mind, here are two UK shares that could deliver impressive recoveries after disappointing performances so far in 2020.

Turnaround potential after the stock market crash

The share price performance of Diageo (LSE: DGE) has been disappointing in 2020, with the alcoholic beverages company recording a 17% decline following the stock market crash.

Looking ahead, it faces an uncertain future due to travel restrictions and lockdown measures that are causing lower demand for its products in many major markets around the world. However, its cost reduction strategy, recent acquisitions and strong stable of brands suggest that it has the capacity to recover as the world economic outlook gradually improves.

Furthermore, Diageo’s recent results highlighted the investment it is making in data opportunities. They may help it to understand changing consumer tastes following the pandemic, which may enable it to maintain a strong competitive position that leads to share price growth in the long run. As such, now may be the right time to buy it following its recent decline.

Rising sales in an uncertain market

Sainsbury’s (LSE: SBRY) is another UK share that has fallen 17% since the start of the year. The market crash has caused investor sentiment towards the wider retail sector to come under pressure despite the company reporting a rise in its total retail sales of 8.5% in the first quarter of the current year.

Sainsbury’s seems to be in a good position to capitalise on rising consumer demand for online ordering. Its online sales doubled in the first quarter of the year, and it plans to roll out faster and more convenient delivery opportunities that could strengthen its market position.

The company continues to keep prices low to remain competitive versus sector peers. It recently recorded all-time high customer feedback levels that could differentiate it versus rivals, and may help to improve its margins. This may boost its financial outlook and strengthen its share price prospects.

Future uncertainties

Clearly, a second stock market crash cannot be ruled out in the coming months. This could negatively impact on UK shares, including Diageo and Sainsbury’s.

However, with both stocks down heavily this year and appearing to have the right strategies through which to deliver strong growth, now could be the right time to buy them in a Stocks and Shares ISA and hold them for the long run. They could produce successful turnarounds that boost your ISA’s performance in the coming years.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Peter Stephens owns shares of Diageo. The Motley Fool UK has recommended Diageo. 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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