Top UK shares for 2021! 3 hot dip buys I think could help me get rich and retire early

Are these three UK shares too cheap to miss following recent price falls? Royston Wild reckons the answer is an emphatic YES!

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

The outlook for the global economy remains less than obvious as we enter 2021. Worsening Covid-19 infection rates threaten to disrupt the effectiveness of a vaccine rollout and, as a consequence, the economic rebound. The profits picture for many hundreds of UK shares remains as clear as mud.

That’s not to say I won’t be investing in my own Stocks and Shares ISA in the months ahead though. The London Stock Exchange is packed with shares that remain on course to deliver delicious long-term returns. Here are a few I reckon are too good to miss following share price weakness.

UK share #1: Big Yellow Group

Self-storage play Big Yellow Group’s share price has dropped by mid-single-digit percentages this year. It’s a mild dip compared with the eye-watering declines other UK shares have endured. And it’s a drop that still leaves the business dealing on a meaty forward P/E ratio of 26 times.

But it’s a reversal that fails to reflect just how strong trading has remained at Big Yellow in Covid-19 times. Not even a pandemic, nor the worst economic crash for 300 years on these shores, could stop like-for-like revenues from continuing to rise (up 2.4% in the six months to September). And supportive factors like a huge buy-to-let market and the growth of online shopping mean demand for its storage pods should keep soaring over the long term.

Image of person checking their shares portfolio on mobile phone and computer

UK share #2: Avon Rubber

Body armour builder Avon Rubber has had a much stronger 2020 by comparison. In fact its share price doubled in value during the first 11 months of the year before strong profit taking and a troublesome trading update last week sent it plummeting. This UK share’s now up just 50% from January 1.

I’d use this weakness as a fresh buying opportunity. The mask maker’s dizzying forward earnings multiple has now been chopped down to a much-more palatable 24 times. And this reading’s quite reasonable, in my opinion, given Avon Rubber’s mighty profits outlook. Grand View Research reckons the company will grow at a compound rate of 5.5% through to 2025. It’ll be worth a colossal $3bn at the end of the period, it reckons.

UK share #3: Prudential

Like that of Big Yellow, Prudential’s share price is down by mid-single-digits since 1 January. The FTSE 100 life insurer has regained acres of ground in recent months, but at current prices it still looks too cheap to miss. Today, this UK share trades on a P/E ratio of just 9 times for 2021.

It’s a reading that fails to reflect its immense profits opportunities in Asia. Soaring product demand in these emerging regions have turbocharged Prudential’s bottom line over the past decade. Covid-19 disruption is likely to have whacked the brakes on such impressive profits growth.

But growing wealth levels and rising populations mean The Pru’s long-term investment case remains in tact. One final thing. The Footsie firm’s decision to hive off its Jackson division in the US will allow it to double-down on Asia and exploit these huge markets to the maximum.

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.

Royston Wild owns shares of Prudential. The Motley Fool UK has recommended Avon Rubber and Prudential. 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.

More on Investing Articles

Investing Articles

Could the JD Sports Fashion share price double in the next five years?

The JD Sports Fashion share price has nearly halved in the past five years. Our writer thinks a proven business…

Read more »

Bus waiting in front of the London Stock Exchange on a sunny day.
Investing Articles

If interest rate cuts are coming, I think these UK growth stocks could soar!

Falling interest could be great news for UK growth stocks, especially those that have been under the cosh recently. Paul…

Read more »

Investing Articles

Are these the best stocks to buy on the FTSE right now?

With the UK stock market on the way to hitting new highs, this Fool is considering which are the best…

Read more »

Petrochemical engineer working at night with digital tablet inside oil and gas refinery plant
Investing Articles

Can the Centrica dividend keep on growing?

Christopher Ruane considers some positive factors that might see continued growth in the Centrica dividend -- as well as some…

Read more »

Smiling family of four enjoying breakfast at sunrise while camping
Investing Articles

How I’d turn my £12,000 of savings into passive income of £1,275 a month

This Fool is considering a strategy that he believes can help him achieve a stable passive income stream with a…

Read more »

Person holding magnifying glass over important document, reading the small print
Investing Articles

2 top FTSE 250 investment trusts trading at attractive discounts!

This pair of discounted FTSE 250 trusts appear to be on sale right now. Here's why I'd scoop up their…

Read more »

Smiling young man sitting in cafe and checking messages, with his laptop in front of him.
Investing Articles

3 things that could push the Lloyds share price to 60p and beyond

The Lloyds share price has broken through 50p. Next step 60p? And then what? Here are some thoughts on what…

Read more »

Young female business analyst looking at a graph chart while working from home
Investing Articles

£1,000 in Rolls-Royce shares a year ago would be worth this much now

Rolls-Royce shares have posted one of the best stock market gains of the past 12 months. But what might the…

Read more »