[date-today format='F j, Y']

UK shares to buy for growth today

Rupert Hargreaves takes a closer look at some of his favourite UK shares to buy for growth over the next couple of years. The post...
photo of outer space
Photo by NASA

When I am looking for UK shares to buy for growth, I concentrate on companies that offer something special to their respective markets. I believe a unique competitive advantage is vital if a business is going to succeed in the long term.

There are not many of these opportunities on the London market. It takes a lot of time to uncover these world-beating companies, but I believe I have been able to isolate two potential opportunities. 

With that in mind, here are the two UK shares I would buy for growth today. 

UK shares for growth

The first company on my list is information technology (IT) infrastructure solutions provider Softcat (LSE: SCT). This business has grown at breakneck speed over the past few years. Since 2016 its earnings per share have grown at a compound annual rate of 24%.

As the world becomes more digitised, I expect the demand for this company’s services will continue to increase. As long as management continues to invest in the organisation’s capabilities and expand its footprint, I think the business can rise to the challenge.

That said, this is quite a competitive market. Softcat will need to keep investing and putting its customers first if the enterprise is going to remain a leader in this market. 

Even after taking this challenge into account, I believe it is one of the best UK shares to buy for growth. Considering its position in the market and potential for expansion over the next five to 10 years, I think the stock is undervalued. 

Building growth

I would also acquire Travis Perkins (LSE: TPK) for my portfolio. This distributor of building materials and products across the UK is not the only company in the sector, but it does have one of the most extensive footprints. This footprint gives the corporation substantial economies of scale. That means it can provide services and products to customers at a lower cost than many of its competitors. 

The business is currently having to deal with several challenges. These include the supply chain crisis and rising materials costs. These headwinds could have an impact on the company’s growth in the next few years as it works through the issues. 

Nevertheless, I believe Travis has the qualities required to pull through this uncertainty. It could even emerge stronger on the other side if its competitors start to struggle.

City analysts are forecasting a 40% expansion in the enterprise’s profits this year as it capitalises on the UK’s booming construction market.

Based on these projections, the shares are selling a forward price-to-earnings (P/E) multiple of 12.7. I think that looks cheap compared to the company’s growth potential. This is why it sits at the top of my list of the best UK shares to buy for growth today.

The post UK shares to buy for growth today appeared first on The Motley Fool UK.

FREE REPORT: Why this £5 stock could be set to surge

Are you on the lookout for UK growth stocks?

If so, get this FREE no-strings report now.

While it’s available: you’ll discover what we think is a top growth stock for the decade ahead.

And the performance of this company really is stunning.

In 2019, it returned £150million to shareholders through buybacks and dividends.

We believe its financial position is about as solid as anything we’ve seen.

Since 2016, annual revenues increased 31%
In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259
Operating cash flow is up 47%. (Even its operating margins are rising every year!)

Quite simply, we believe it’s a fantastic Foolish growth pick.

What’s more, it deserves your attention today.

So please don’t wait another moment.

Get the full details on this £5 stock now – while your report is free.

More reading

UK shares are rising. Here are 2 stocks I’d buy now
3 top growth stocks near 52-week lows
1 FTSE 250 tech stock I’d buy and hold for 10 years!

Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has recommended Softcat. 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.





© 2022 The Daily Encrypt. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Latest News