The Motley Fool

5 top UK shares to buy

A stack of ASOS delivery bags
Image: Royston Wild

As the UK economy starts to recover from the pandemic, I’ve been looking for UK shares to buy for my portfolio that might benefit from the recovery. 

There are a couple of sectors I want to focus on. For a start, I think the outlook for the homebuilding sector is incredibly encouraging. 

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

UK shares to buy today

Low interest rates coupled with a lack of supply are two factors that have been driving home prices higher for the past decade. The government is trying to stimulate building with planning reforms, which may increase supply, but this will take some time to come through. 

In the meantime, I think these reforms and higher home prices will benefit builders such as Taylor Wimpey and Barratt Developments

Both of these firms have reported strong earnings recently. In a trading statement issued at the end of April, Taylor noted its order book was worth £2.8bn compared to £2.7bn in the prior period a year ago. The company also said it’s looking to push profits back into new dwellings for sale.

Meanwhile, Barratt noted at the beginning of July that forward home sales across its businesses have more than recovered from the pandemic. 

This growth potential is the primary reason why I’d buy both UK shares for my portfolio today. Key risks the firms may face as we advance include an interest rate rise, making housing less affordable. Increasing supply may also push down property prices. 

Another sector I want to have exposure to is e-commerce. Two fashion-based companies I believe are exceptional operators in this sector are Asos and Next

Online sales

Asos operates an online-only business model, while Next owns brick-and-mortar stores as well as a booming online business. Last year, Asos’s sales expanded 24%, and its active customer base increased to 24.9m. With users all around the world, I think the company is one of the best online retailers to own. 

Next’s sales lagged last year as many of the firm’s brick-and-mortar stores closed. However, the company is investing hundreds of millions of its online operation and this division now counts for more than 50% of sales. As the group continues to invest, I think it has tremendous potential. That’s why I’d buy it for my portfolio UK shares. 

However, the retail sector is incredibly competitive. So while both of these companies might be beating the market today, there’s no guarantee they’ll continue to do so. That’s probably the biggest risk and challenge they face right now. 

Finally, I’d buy public transport operator National Express for my portfolio of UK shares. Public transport use has plunged over the past 16 months. But I believe if the government is going to meet its green commitments, it’ll have to encourage public transport use over the next few years.

With that in mind, I’d use the current decline in the National Express share price to buy up this leading operator at a discounted price. That said, another coronavirus wave could devastate the business, and hold back its recovery.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic…

And with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be daunting prospect during such unprecedented times.

Fortunately, The Motley Fool is here to help: our UK Chief Investment Officer and his analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global lock-down…

You see, here at The Motley Fool we don’t believe “over-trading” is the right path to financial freedom in retirement; instead, we advocate buying and holding (for AT LEAST three to five years) 15 or more quality companies, with shareholder-focused management teams at the helm.

That’s why we’re sharing the names of all five of these companies in a special investing report that you can download today for FREE. If you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio, and that you can consider building a position in all five right away.

Click here to claim your free copy of this special investing report now!

Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Next. The Motley Fool UK has recommended ASOS. 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.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.