If I had a spare £1,000 to invest today, what would I do? Here’s my list of UK shares to buy now for my portfolio with £1,000. To diversify my risk, I’d invest in at least two of them.
On the money
Yesterday I outlined why I’m excited about the growth prospects for JD Sports. Today, the company delighted the City by upgrading its profit guidance.
JD said it expects full year pre-tax profits before exceptional items to be at least £550m. The shares have moved upwards following the good news, but I still see a buying opportunity. JD has been a growth machine for many years. Its proven retail formula and compelling pricing are effective at attracting customers.
One risk though, which the company pointed out when upgrading its profit forecast, is the potential negative sales impact of any further lockdowns.
Advertising network WPP (LSE: WPP) has added 59% in the past year. That brings it back roughly to where it traded before the pandemic.
But a lot has changed since then. Demand for advertising has surged, leading to perhaps the strongest market since the 1970s. New ways of working promise to cut costs. WPP has focused more on matching its digital offering to the needs of an evolving demand landscape.
I think the company still has work to do, but I see that as reflected in the share price. While it’s done well over the past year, it’s 39% below where it stood five years ago in the glory days of Sir Martin Sorrell’s leadership. One risk is that WPP’s ongoing organisational transformation distracts staff, which could hurt the quality of its work. In advertising, that matters. But I’d consider WPP as UK shares to buy now.
UK shares to buy now: Computacenter
Shares in Computacenter (LSE: CCC) have fared better than WPP over the past five years, returning 250%. Indeed, after a 55% increase in the past year, the Computacenter share price is now just a few percentage points off its all-time highs.
But I think there could still be more road ahead for the shares. While the IT services company is not a white hot tech stock, it does provide an important service to its global customer base. The pandemic caused many companies to cut budgets, but when it comes to IT spending, the opposite was true. Widespread adoption of remote working drove tech spending up. That positive momentum has continued, with Computacenter saying it is “extremely pleased with the profit growth… achieved in the first quarter”.
One risk, though, is that the past year of IT spending has simply brought forward customers’ spending plans. That could lead to smaller revenues in coming years.
FTSE 100 share with 4.5% yield
Unlike its rival Morrisons, the UK’s leading supermarket chain Tesco hasn’t seen its price surge after a takeover bid. That undisturbed share price is why I include it on my list of UK shares to buy now.
The company has its fair share of risks. For example, its digital sales have boomed but delivery costs mean they’re less profitable than in-store sales. However, I still see a lot to like about Tesco. It has huge economies of scale, its increased UK focus should sharpen performance, and the dividend yield is 4.5%. For a FTSE 100 member, I think that’s attractive.
Christopher Ruane has no position in any shares mentioned. The Motley Fool UK has recommended Morrisons and Tesco. 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.