I think some of the best UK shares to buy right now are high-quality companies that have fallen on hard times. I also believe there are some fantastic opportunities in the mid-cap growth section of the market. With that in mind, here’s a selection of businesses I’d buy for my portfolio with £5,000 today.
Some of the best UK shares to buy are growth investments. Two such companies are Premier Foods and Reach. I’ve been following these stories for several years. Both exited the financial crisis on life support, and they’ve been in recovery mode for the majority of the time since.
However, last year was an inflection point for both firms. Premier achieved windfall profits as the demand for home baking goods and cakes jumped. Meanwhile, Reach’s user base surged as suck-at-home consumers turned to its online news sites for information.
In both cases, these companies have used their windfall profits to reduce debts and invest in growth. This is why I think these are some of the best UK shares to buy and would acquire both for my £5k portfolio.
Some challenges they may face as we advance include competition and rising costs, both of which could eat into profit margins and slow growth. As turnaround plays, these companies may not be suitable for all investors.
Best UK shares to buy
As well as Reach and Premier Foods, I think some of the best UK shares to buy can be found in the property sector.
Commercial property values plunged last year as brick-and-mortar stores were forced into lockdown closures. However, I think the market has overreacted in some cases, presenting exciting opportunities for investors.
Rather than buying any old property organisations, I’d focus on the best. A good example is Great Portland Estates, which owns a portfolio of commercial properties in and around London’s West End.
Activity is returning to the area and, in this trophy property market, buyers are still willing to pay high prices. Great Portland has seen rising demand for its office properties, and occupancy’s recovering across the portfolio.
A company with a more diversified portfolio is Landsec. Once again, this real estate investment trust has an extensive portfolio of London property, but it also owns other properties around the UK, such as shopping centres. This diversification proved to be invaluable throughout the pandemic.
I’d buy both Landsec and Great Portland for my portfolio today. I think they are some of the best UK shares to buy for the reasons outlined above. They are also both trading at discounted valuations, as investors are still wary of the property sector.
Some challenges they may face as we advance include higher interest rates, which could push property prices lower. The reintroduction of coronavirus restrictions could also impact their recoveries.
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Rupert Hargreaves owns shares in Great Portland Estates. The Motley Fool UK has recommended Landsec. 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.