UK share prices are rising again as hopes for the reopening of the world economy improve. And demand for reopening stocks in particular is beginning to spark once more.
Okay, it’s too early to claim that the fight against Covid-19 has turned the corner. Vaccination drives in parts of the world are ticking along nicely. But, at the same time, global infection numbers are edging higher again. That said, I have my eye on a few reopening stocks to buy in my Stocks and Shares ISA today in case of a strong economic recovery this year. I think the following UK shares could provide big returns over the next decade too.
A cash-rich reopening stock
Now Wizz Air (LSE: WIZZ) isn’t a reopening stock for the faint of heart. The UK airline share said this week it expects to report an underlying loss of up to €495m for the financial year to March. While Wizz Air expects “a gradual traffic recovery into late summer 2021,” a steady uptick in Covid-19 cases in Europe could put paid to these plans and cause more bottom-line pain.
In better news though, the Hungarian airline has been making huge strides to manage cash as its planes have been grounded. And it had impressive cash and cash equivalents of €1.62bn on its balance sheet as of last month.
I’m confident this UK share will have the strength to fly through the current crisis and deliver big shareholder returns over the longer term. Travel activity in its core Central and European markets should soar as wealth levels in these regions rise. And Wizz Air should benefit from reduced competition following the global pandemic too.
In great shape
With gyms and fitness centres reopening all over the globe, I’m expecting trading at Science in Sport to improve considerably. This UK share provides everything the modern fitness enthusiast needs to meet their goals, from protein powders and caffeine gels, to vitamin tablets and energy bars.
This is a gigantic market which looks set to keep swelling as the growing popularity of healthier lifestyles — as well as the rising importance of being ‘beach body ready’ all year round — increases. Science in Sport reckons the sports nutrition market will grow at 8% per year and be worth £18bn by 2023. Beware though, that competition in this industry is growing rapidly and this could derail profits growth here.
I think the Boohoo Group share price will also rise as Covid-19 lockdowns end and people get out and about again. Latest Office for National Statistics data showed clothing volumes rose by a hefty 17.5% month-on-month in March.
I expect sales growth to remain explosive too as government restrictions are eased. I like this particular reopening stock as its focus on the booming e-commerce segment should deliver great long-term revenues growth. A word of warning however. Competition in the value-to-mid-level clothing segment is also intense. This could heap extra pressure on Boohoo’s already-pretty-thin margins.
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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended boohoo group and Wizz Air Holdings. 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.