I’m on the hunt for top UK shares to add for my Stocks and Shares ISA this July. Here are two great companies (including a FTSE 100 share) that I’m thinking about buying in July.
An exciting FTSE 100 share
I think investing in Croda International (LSE: CRDA) could be a good idea before the UK share releases half-year results soon. The FTSE 100 stock is set to update the market on Tuesday, 27 July, an event I think could lead to further share price gains. The chemicals manufacturer has risen 35% in value over the past 12 months.
Full-year financials in March showed pre-tax profits tumble 11% due to Covid-19. But the speciality chemicals play indicated then that trading conditions have improved more recently. Indeed, it said that “2020 sales exit rates were encouraging with consumer and industrial end markets showing signs of recovery”.
Now Croda isn’t out of the woods just yet. The ongoing public health emergency could swiftly cut off any sales recovery at the this UK blue chip share. What’s more, its heady forward price-to-earnings (P/E) ratio of 35 times might lead to a share price correction if trading conditions worsen again. Stocks with high valuations are most vulnerable of sudden drops in such instances.
But right now I think the potential rewards outweigh the risks. The outlook for the FTSE 100 firm’s Consumer Care and Life Sciences operations seems to getting brighter and brighter. And as a long-term investor, I’m encouraged by Croda’s commitment to M&A. In recent weeks the business spent €45m to acquire French fine fragrance experts Parfex.
A top UK share for the digital revolution
I think buying Kape Technologies (LSE: KAPE) could be another good idea for July. Cyber attacks continue to rise at an alarming rate so I expect demand for the IT security expert’s services to keep soaring.
Research by Atlas VPN shows the scale of the challenge facing businesses in the post-coronavirus era. This shows that 78% of cyber security professionals globally have witnessed an uptick in Internet attacks during the past year. Meanwhile, companies that have been affected say that they have endured an attack on average 2.35 times in the past 12 months.
Atlas VPN says that the number of attacks has risen due to the growing popularity of home working. This is likely to provide UK tech shares such as Kape with plenty of opportunity in the years ahead as more and more companies migrate to flexible working models.
This explains why City analysts think annual earnings at Kape will surge 84% in 2021 (incidentally they predict a 16% year-on-year rise at Croda International, too). Of course there are perils facing the cyber security giant in the near term and beyond. It doesn’t have the resources of industry giants like Microsoft. A high-profile failure of its systems could also significantly damage profits later down the line. But right now I still think the UK information technology share is an attractive stock to buy for my ISA in July.
Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Royston Wild has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Microsoft. The Motley Fool UK has recommended Croda International. 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.