The tough economic outlook means that many of us aren’t thinking about which UK shares to buy for the next bull market.
It isn’t just the worsening Covid-19 situation that casts doubt over the economic recovery and could lead to a fresh stock market crash. The threat of a fresh sovereign debt crisis, as countries increase borrowing, also looms large.
Added to this, Britain and the European Union’s ongoing failure to draw up a post-Brexit trade deal is another possible problem that could hammer the global economy, UK share profits, and hit investor appetite hard.
I’ve gone ISA shopping!
Failing to look beyond the current crisis could be a huge mistake, though. It means than UK share investors like me could miss a chance to chance to get seriously rich from the next bull market. And make no mistake: stock markets always soar following macroeconomic, geopolitical and social crises like we are facing today.
I’ve continued to invest in UK shares through my Stocks and Shares ISA in 2020. I’ve bought into Tritax Big Box and Clipper Logistics which are plays on the e-commerce sector. Profits at these companies should rocket during the economic recovery as consumer spending patterns pick up again.
2 other UK shares I’m thinking of buying
There are tons of other cyclical stocks on my watchlist for the next bull market too. Here are a few quality, and cheap, UK shares I’m also thinking of adding to my ISA today:
- Buying TI Fluid Systems shares is a great way to play the early stages of the economic recovery. This UK share builds components for automobiles like brake and fuel lines, and thermal gadgets and injection systems inside engines. It’s more than 100 manufacturing sites spread across 30 countries and this makes it the supplier-of-choice for many major auto manufacturers. Spending on cars is one of the first things to spring higher when economic conditions improve. Consequently, profits here are likely to bounce back much sooner than those of many other UK shares.
- I’m considering snapping up Coca-Cola HBC as consumer goods company profits also rise quickly during economic upturns. And, like TI Fluid Systems, which trades on a low price-to-earnings (P/E) ratio of 11 times for 2021, it offers brilliant value for money. The FTSE 100 giant trades on an undemanding price-to-earnings P/E ratio of 14 times for next year. I don’t think this low multiple reflects the firm’s other qualities either, like its immense brand power. It’s the world’s most value soft drinks brand worth a whopping $36.2bn, according to Brand Finance. The huge amounts it spends on product innovation (like refining its recipes and entering fast-growing markets like the low calorie segment) means Coca-Cola HBC continues to build its rapport with the public too. I’d not only buy this Footsie stock for the economic recovery, but hold it forever.
Savvy investors like you won’t want to miss out on this timely opportunity…
Here’s your chance to discover exactly what has got our Motley Fool UK analyst all fired up about this ‘pure-play’ online business (yes, despite the pandemic!).
Not only does this company enjoy a dominant market-leading position…
But its capital-light, highly scalable business model has previously helped it deliver consistently high sales, astounding near-70% margins, and rising shareholder returns … in fact, in 2019 it returned a whopping £150m+ to shareholders in dividends and buybacks!
And here’s the really exciting part…
While COVID-19 may have thrown the company a curveball, management have acted swiftly to ensure this business is as well placed as it can be to ride out the current period of uncertainty… in fact, our analyst believes it should come roaring back to life, just as soon as normal economic activity resumes.
That’s why we think now could be the perfect time for you to start building your own stake in this exceptional business – especially given the shares look to be trading on a fairly undemanding valuation for the year to March 2021.
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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