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2 top UK shares to buy in July

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Here are two top UK shares I think are great stocks for me to buy this July.

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Recent news coming out of Watches of Switzerland Group (LSE: WOSG) has been pretty spectacular. It leads me to believe the luxury retailer could be a sage buy before full-year financials on Thursday, 8 July.

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The introduction of Covid-19 lockdowns and the subsequent closure of its shops couldn’t stop revenues rising in the last financial year. In fact, at £905.1m, sales in the 12 months to April 2021 jumped 13% to the top of end of expectations. Furthermore, income soared 82% in the final three months of the fiscal year as its stores reopened.

It’s said that buyers of big-ticket items prefer to see their purchases in the flesh before flashing the plastic. But the terrific performance of Watches of Switzerland runs counter to this idea. Online sales rocketed 121% year-on-year in financial 2021. And they soared 218% during the final three months of the period too.

Now, Watches of Switzerland shares don’t come cheap. This UK retail share trades on an enormous forward price-to-earnings (P/E) ratio of 34 times. It’s the sort of elevated valuation that could lead to a significant share price drop  if demand for its Rolexes, Omegas and other luxury timepieces begins to wane. I still think the business is a great buy, however, given the excellent progress it is making in the fast-growing e-commerce space, as well as in the US.

Another top UK share to buy

I’m also tempted to invest in Knights Group (LSE: KGH) before full-year results are unfurled on Wednesday, 14 July. Last time the legal services provider updated the market, it predicted that revenues for the 12 months to April would beat forecasts thanks to “good organic growth” in the second half.

Knights Group is a UK share with the bit between its teeth and its core business is firing on all cylinders. Though I wouldn’t just buy the company in anticipation of a sunny follow-up to May’s most recent release. The legal giant remains extremely active on the acquisitions trail to deliver supreme long-term profits growth. This month it sealed the takeover of Sheffield-based commercial lawyers Keebles. And it has its crosshairs trained on more M&A targets.

Chief executive David Beech recently commented that the business “expects to selectively execute on an attractive acquisition pipeline during the current year,” adding that the medium-to-long-term impact of Covid-19 has accentuated “the group’s acquisition opportunities in the highly fragmented market for legal services outside London.”

City analysts think annual earnings at Knights Group will rise 25% in financial 2022. This leaves the UK support share trading on a forward PEG ratio of just 0.7. It’s true that an acquisition-led growth strategy like that of Knights Group creates additional risks. Costs can unexpectedly rise and earnings contributions can disappoint from newly-purchased assets. But I still think the company is a top UK share to buy and particularly at recent prices.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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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