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What are the best UK shares to buy now?

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Choosing which UK shares to buy now is never easy. I like to begin with the FTSE 100 and look for company names I recognise and understand. Once I’ve honed in on one, I then look at how its share price has been performing. I then look for reasons it may be declining or rising. Recent news sources and Motley Fool articles are great for finding this out.

If I want to look more closely at these UK shares, then I’ll go to the company website and read its most recent annual report or trading update for an idea of how the company is performing and how it expects to perform in the coming months.

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Here are some examples:

Should I invest in Rolls-Royce?

I like Rolls-Royce. I think it’s a company with a strong heritage, engineering prowess, and scope to expand its cutting-edge technologies. However, it’s been particularly hard hit by the pandemic and has increased its debt exponentially in recent months just to stay afloat. As a very long-term investment, I would consider buying Rolls-Royce shares, but there is still risk attached. Today Rolls-Royce has a market cap of £6bn, but a year ago it was worth over £18bn. This FTSE 100 firm has a long way to go to recover, and investors need to be in it for the long haul.

Should I buy IAG shares?

Airline IAG has had a terrible year. The British Airways owner incurred a massive post-tax loss of €5.57bn during the first nine months of 2020. To survive it has cut jobs, restructured, and borrowed extensively, but to stand any chance of recovery it needs flights to resume. IAG has a €9bn market cap, but its net debt is €11.1bn. Its price-to-earnings ratio (P/E) is 2 and earnings per share (EPS) are €0.87. I’m not tempted to buy IAG shares.

Compass pointing towards 'best price'

Should I buy Cineworld shares?

As far as cheap UK shares go, Cineworld is definitely among the cheapest. But that doesn’t mean they’re a bargain. Cineworld has a P/E of 6 and EPS is 9.8p. Its market cap is £820m, down from £2.7bn a year ago. Cineworld had a ridiculous level of debt before the pandemic hit and has clawed its way through 2020 by piling on more and more. I don’t think it’s sustainable. And with the rise of streaming and on-demand viewing, I don’t think Cinema has the same consumer draw it once had. Personally, I will not be buying Cineworld shares.

Will the Shell share price recover?

I like Royal Dutch Shell and think the Shell share price will recover. The oil industry has taken a massive hit this year. Covid-19, oversupply problems and geopolitical tensions have created a perfect storm of destruction for the sector. Nevertheless, I think the price of oil will rise again. Even with a global push to move to electric vehicles, oil is a necessary evil in our lives. Shell is still an oil company, but it’s also transitioning to renewables. It’s a vast entity and as such I think the Shell share price will recover in time.

On a search for the best UK shares to buy now, I usually sift through a few to avoid. Having confidence in the future of my share buys helps me be a happy long-term holder.

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Kirsteen owns shares of Royal Dutch Shell B. 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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