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I think these UK shares could triple my money in 2021

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I think there are a handful of UK shares that could not only double but triple investors’ money in 2021. 

In my opinion, these businesses are set to benefit from a double tailwind. The ending of the coronavirus pandemic as well as a resolution to Brexit will help these companies. If anything, I think it should give them some certainty about the future. 

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Premier Foods (LSE: PFD) has been a challenging investment to hold over the past two years. However, over the past 12-months, the corporation has seen a surge in demand for its products.

This has produced some much-needed cash flow for the company, which has allowed it to reduce debt and reduced its pension obligations. Now, the business looks well-placed to grow for the next few years.

I think 2021 could see a significant re-rating for the stock, which has commanded somewhat of an uncertainty discount over the past few years. Profits are expected to hit nearly £90m in 2021. That’s the highest level since the financial crisis. Despite this, the shares continue to trade at a discount of around 50% to their market average.

On top of this, the market doesn’t seem to me to truly appreciate Premier’s long-term growth potential. Similar businesses in the US are trading at significantly higher valuations, which suggests to me the stock could double or triple in the near term. 

Uncertainty discount

Reach (LSE: RCH) is another one of the UK shares currently dogged by an uncertainty discount. The national and regional news publisher is projected to earn over £100m of net income in 2021. Its current market capitalisation is just £400m. 

I think the reason why investors have given this business such a wide berth is the fact it’s difficult to tell what the future holds for Reach. The company has reported declining sales at its print publications for many years.

Nevertheless, digital publications are now starting to take up the slack. This trend should only accelerate in the years ahead and, as it does, I think investor sentiment towards the enterprise will shift. Investors may see large total returns on their investment as part of this re-rating.

A potential dividend yield of 5.2% only adds to the appeal, in my opinion. 

Government spending 

Iron ore miner Ferrexpo (LSE: FXPO) has significantly more international diversification than any other UK shares. This could benefit the business in the years ahead, according to my research

The company produces high-quality iron ore, the price of which has jumped in 2020. Governments around the world are planning to spend hundreds of billions of pounds over the next few years on infrastructure projects to rebuild after the pandemic. This projected demand has helped drive the iron ore price higher in recent months. It seems reasonable to suggest this upward pressure will continue. 

Still, despite the company’ potential, the stock remains cheap. It’s trading at a mid-single-digit price-to-earnings (P/E) multiple. Considering the group’s potential, I reckon that undervalues the business. A mid-teens multiple might be more reasonable considering Ferrexpo’s growth potential. 

As such, I reckon this investment could produce large total returns for investors when owned as part of a diversified portfolio of UK shares. 

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Rupert Hargreaves 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.

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