3 Top UK Stocks To Invest £100 In Right Now

They could put you on a path to wealth building

Last Updated October 14th 2021
5 Min Read

Key points

  • Ocado is investing heavily in driverless tech to cut costs long-term.
  • Taylor is set to benefit from the fast-growing UK real estate market.
  • International Consolidated Airlines has received a boost after the reopening of the UK economy.

With billions of pounds changing hands in the equity markets daily, it is easy to think it’s a market for the rich. However, you can invest any amount and still make a good profit out of the market. All you need is to have a long-term view of the market.

Below are 3 top UK stocks to invest £100 in right now, and put yourself on course to wealth building and financial freedom.

Ocado

Ocado (OCDO) has recently suffered some misfortunes, which have seen the stock drop by 34% in the last 52-weeks of trading. The largest of these misfortunes was a fire at one of the company’s warehouses back in June. A collision between robots caused the fire and cost the company £10 million.

The other misfortune is more external and has to do with labour shortages in the UK. There is a huge shortage of drivers in the UK at the moment, and this has hit the UK logistical networks hard. Ocado announced that it was spending an extra £5 million to hire drivers to deal with this problem.

While both of the above issues have hit the company’s revenues and cash flows, they are short-term in nature. The company still has the resources to get its warehouse back up. On the issue of driver shortages, this problem will go away as the post-pandemic global economy stabilizes.

Besides, Ocado is making strategic moves that could see it cut its reliance on human drivers in the long run. The company recently announced that it had invested £10 million in driverless tech company, Wayve. Part of the deal will see Ocado delivery vans fitted with Wayve’s autonomous driving technology for a trial period of 12-months.

The company made a similar investment back in April when it invested £10 million for a stake in Oxbotica, a UK maker of self-driving cars. Through this investment, Oxbotica will build self-driving cars for Ocado and other companies.

These investments indicate that Ocado is keen on relying more on autonomous vehicles for its grocery deliveries. This means substantial cost savings in the long run and a boost to the company’s value.

External factors are also in Ocado’s favour going into the future. Even before the pandemic, e-commerce was replacing brick-and-mortar businesses. The COVID-19 pandemic accelerated it, and every indication points to online shopping getting even bigger. For a company like Ocado that already has a market presence in the online grocery business, this only points to more growth in the future.

With so many factors in its favour going into the future, Ocado is a pretty good stock to invest £100 in right now.

Taylor Wimpey

Taylor (TW) is up by 55% in the past 52-weeks of trading and doesn’t seem to be easing up. This is in line with the boom in the UK property market. Since 2020, the value of UK residential property has shot up at a rate last experienced 16-years ago.

While the pandemic-era subsidies have largely driven this, consumer optimism in the economy is now driving demand. The only risk in the short term is a sharp increase in interest rates.

Bond yields in the UK are already hitting new highs, as investors bet on the Bank of England raising interest rates before the end of the year. The BoE chairman has also been quite vocal about the rising inflation and believes it is a risk to the economy.

While an increase in interest rates may tamper real estate momentum in the short-term, long-term, the prospects look good. That’s because the UK remains one of the best real estate markets in the world. This means it will keep attracting investors, both local and foreign, for many years to come.

At the same time, millennials are now entering the home-buying age, and over time, will form the bulk of new home buyers. This will keep pushing up the demand for residential real estate going into the future.

For companies like Taylor, these factors present a huge opportunity for growth going into the future. By extension, this company’s stock has good prospects for investors who take a long-term view of the market. It is a worthy buy for someone looking to put £100 in the stock market today.

International Consolidated Airlines

At an average of £1.81 per share, £100 can build a small International Consolidated (IAG) stock portfolio. However, it is not just a matter of how many shares that £100 can buy, the fundamentals matter too, and this company has them.

The company has benefited immensely from the economic reopening after the COVID-19 pandemic. This has seen its stock price shoot up by over 110% in the last 52-weeks of trading.

With vaccination levels on the rise globally, the whole world looks set to get back to normalcy in short to medium term. The UK is already setting the pace by removing even more countries from its red list in a bid to push up air travel. This spells good tidings for International Consolidated and other airline companies.

Aside from the improving macro-environment, International Consolidated Airlines’ internal fundamentals look pretty good too. Despite the pandemic hitting airlines hard, this company has managed to maintain a current ratio of 0.86, which means it can still meet most of its short-term debt obligations. Now that air travel is back, these numbers are bound to get even better.

Its revenues have bounced back pretty well, too, an indicator of its strong market position. Its quarterly revenue growth numbers now stand at 77%. As air travel bounces back, these numbers will only get stronger.

All these factors make IAG a pretty good stock to bet £100 on today.

 

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