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3 UK shares I’d buy right now in my ISA

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There’s been a decent bull run for many UK shares since last spring. But there are still a few I’m keen to buy and hold in my Stocks and Shares ISA.

A UK share benefiting from e-commerce trends

For example, FTSE 100 packaging and paper company Mondi (LSE: MNDI) operates in an attractive sector. The company delivered a positive outlook statement in last October’s third-quarter update. And I’m expecting a decent trading outcome in the full-year results statement due next week.

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Demand for packaging from e-commerce and consumer applications has been “strong”. And I think the company occupies a decent niche in the supply chain serving deliveries of goods from internet sales. The industry continues to grow and Mondi has opportunities to expand its business in the years ahead as well.

The company scores well against quality indicators. And City analysts expect earnings to advance by a high single-digit percentage in 2021. Meanwhile, with the share price near 1,870p, the forward-looking earnings multiple is around 16.5 for 2021. And the anticipated dividend yield is close to 3%. The valuation looks fair. But the shares could slip back if growth doesn’t materialise as expected.

I’m also keen on London-listed housebuilding companies such as the FTSE 250‘s Redrow (LSE: RDW). There’s a decent tailwind supporting the long-term fundamentals of the sector. And City analysts expect decent progress from Redrow in the short term as well. They’ve pencilled in a robust bounce-back in earnings over the current trading year to June 2021 and continuing into next year.

Strong markets for sales

In February’s half-year results report, the company described a strong sales market during the first half of its trading year. Looking ahead, the directors said the pandemic accelerated changing buyer trends. But Redrow’s strategy is aligned with those trends and the outlook for the business is positive. 

With the share price near 564p, the forward-looking earnings multiple is just below eight for the trading year to June 2022. And the anticipated dividend yield is a little above 4%. I think that valuation is undemanding. However, there’s a big element of cyclicality in the industry and we’ve seen how that can bite. For example, earnings, dividends and the share price all plunged together in the recent Covid crisis.

My third pick is FTSE Small Cap share Stock Spirits (LSE: STCK). The company supplies branded spirits, such as Vodka, in Central and Eastern Europe. And one of the factors I’m keen on is the defensive nature of operations. The business proved its resilience in the recent Covid crisis. When other enterprises crumbled and saw catastrophic collapses in earnings, Stock Spirits traded through with barely a wobble in earnings. And the company didn’t miss a beat with shareholder dividends.

In February’s AGM trading statement, the directors confirmed a positive outlook. Meanwhile, with the share price near 289p, the forward-looking earnings multiple is near 15 for the trading year to September 2022. And the anticipated dividend yield is 3.3%. I think the valuation is fair rather than cheap. And one risk for shareholders is the valuation could contract if forward earnings slip. However, I’m prepared to balance the risks against the long-term potential of the business to grow in the years ahead.

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Kevin Godbold has no position in any share mentioned. The Motley Fool UK has recommended Redrow. 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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