Here are four top UK shares I’d buy for the economic rebound.
A top UK recovery share
History shows us that spending on cars by consumers and businesses always soars during the early stages of economic recoveries. This makes car retailer Pendragon one of the best UK stocks to buy in August, in my opinion.
The business has already seen sales boom in the first half of 2021 and has hiked its full-year forecasts as a consequence. There is some danger to the retailer’s recovery however. A spate of major manufacturers like Mercedes-Benz, Jaguar Land Rover and Volvo have recently warned that microchip shortages will damage their production in the second half. This will have a clear impact on Pendragon’s revenues later this year, and possibly beyond.
The high flyer
I also think Wizz Air could be a top stock to buy right now. Okay, the near-term outlook for the airline industry remains mired with uncertainty as infections spike in some of its key markets and governments maintain or erect travel barriers.
But right now this UK share is slowly feeling its way out of the public health emergency. The Hungarian flyer said last week it’s witnessing “encouraging recovery patterns in passenger air travel,” before adding that it expects capacity to recover fully to pre-pandemic levels in August.
What’s more, Wizz Air has plenty of financial strength to help it survive a prolonged grounding of much of its fleet, with cash sitting at a healthy €1.7bn in June.
There are several good reasons why I think Gear4music could thrive over the next several years. The musical equipment retailer’s huge online operation stands it in good stead to meet the ongoing explosion in e-commerce.
Consumer spending as a whole always improves strongly following economic nadirs, meaning trips to its shops and website could soar.
And the resurrection of the live entertainment industry following the pandemic should prompt an upswing in musicians spending to update their equipment. This is why IBISWorld thinks the musical instrument retail industry will grow around 8% year-on-year in 2021.
It’s worth remembering though, that this market has been declining for the past several years, and that a sales boom at Gear4music could prove short-lived.
The popularity of 10-pin bowling in Britain had been growing strongly in the years leading up to the coronavirus crisis. And it seems as if the industry will keep growing at a healthy rate as operators like Hollywood Bowl Group throw their doors open again.
Recent research suggests the industry will be worth a shade below £300m in 2026, up from around £266m last year. It’s a trend which UK share Hollywood Bowl, as the country’s largest bowling alley operator, is in great shape to exploit, and especially as broader consumer spending looks set to rise sharply.
I’d buy it despite the risk its site expansion programme could fail to deliver on expectations.
Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Hollywood Bowl, Pendragon, 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.