As the UK economy continues to reopen, I’ve been looking for UK shares to buy today for my portfolio. Here are five companies I believe have bright prospects.
The UK shares I like
As the economy recovers from the pandemic over the next few months and years, I think commercial property values will also recover. With that in mind, I’d add Derwent London and Great Portland Estates to my portfolio of UK shares.
Both of these real estate investment trusts own large London property portfolios. The value of these portfolios has been significantly impacted over the past 12 months. However, initial indications show that companies are still renting office space in London. It could only be a matter of time before the retail market comes back as well.
This suggests to me the outlook for these companies could improve as the economy continues to reopen. That said, if there’s another wave of coronavirus, there may be more bankruptcies in the retail sector, which would put these organisations under pressure. Homeworking also presents an issue for businesses with large office portfolios.
The pub returns
Punters have been making the most of pub beer gardens over the past two weeks, and I think this trend will continue as the economy reopens. On that basis, I think drinks groups C&C and Diageo are some of the best UK shares to buy today.
As the world moves on from the pandemic, I think the demand for spirits and beverages will increase, or at least return to 2019 levels. These are some of the best companies on the market to play this recovery, in my opinion. They own portfolios of established brands and have global footprints. That’s why I’d buy these stocks today.
The main risk facing these businesses is another wave of coronavirus. This could derail the global recovery and force consumers to cut back on spending. The rising cost of ingredients may also hurt the profits of these businesses.
Working out
Gym is another recovery play I think could be one of the best UK shares to buy today. The company’s gym facilities have been shut on and off over the past 12 months, but it looks as if consumers have returned quickly as the lockdown has eased.
Management has said it wants to take advantage of the current economic crisis by acquiring vacant high street premises to expand its portfolio. I think this could help turbocharge the group’s growth in the years ahead.
Of course, this does mean there’s a chance the business may end up overexpanding. By growing too quickly, it could end up incurring significant losses if it has to write off unprofitable properties.
There are also many rivals in the sector, and competition is probably the most considerable challenge Gym faces right now.
Nevertheless, based on the company’s growth potential, I’d buy the stock for my portfolio today.
