UK share prices are back on the march and demand for reopening stocks specifically is soaring. These sort of cyclical shares are ones that theoretically will benefit the most from the end of Covid-19 lockdowns and travel restrictions.
The FTSE 100 has just moved back through the 7,000-point marker again in Thursday trading. The fall of this important technical and psychological barrier gives another chance for UK share prices to move significantly higher in the days and weeks ahead.
Clearly the fight against Covid-19 still has much further to run. So I’m not getting too carried away by this fresh rally. Setbacks in the pandemic battle aren’t the only things that could put the prices of so-called reopening shares back on the defensive either. Fears over rising inflation and concerns over resurgent trade wars between major economies also have the capacity to smack UK share prices.
Why I’m hunting for reopening stocks
Having said that, I’ve been scouting for top reopening stocks to buy in my Stocks and Shares ISA. The fight against Covid-19 — and as a consequence the bounceback in the global economy — might not follow a straight line from bottom left to top right. But history suggests that the world will recover from this pandemic. And I plan to make some great returns with some choice UK shares in the process.
Here are two top reopening stocks on my radar today:
1) Marketing mammoth
Strong economic data from the US has put marketing products supplier 4Imprint Group firmly on my radar. Commerce Department data this lunchtime showed economic growth in the States clock in at 6.4% in the first quarter. This was up from 4.8% in the prior three months and reflects the impact of Covid-19 vaccines and massive stimulus packages there. This bodes well for 4Imprint Group as this reopening stock sources almost all revenues from the US. Be aware, though, that sales at 4Imprint Group could disappoint if the marketing approach of some companies begins to change, causing demand for the UK share’s logo-printed pens, cups, sweaters and similar paraphernalia to struggle.
2) A top UK retail share
Halfords Group is another top reopening stock to buy in my opinion. The Covid-19 vaccine rollout in the UK has been particularly impressive. This means that the chances of this UK retail share dumping customer limits in its stores and keeping them junked looks good. I also think the end of coronavirus restrictions and travel restrictions should boost servicing and MOT activity at its Autocentres, as well as sales of its car accessories in store, as people hit the road in large numbers again. One possible fly in the ointment could be a sudden fall in demand for its cycles and cycling accessories, though. The mass reopening of gyms could see people ditch cycling and jump on the treadmill or weights rack instead.
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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended 4imprint Group. 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.