5 No-Brainer UK Shares To Buy In September

Last Updated September 21st 2021
9 Min Read

When looking to build a portfolio of UK stocks, it is best to have it diversified across multiple sectors of the economy. 

Besides spreading capital across multiple sectors of the economy, it is also important to consider company size. Usually, companies with a high market capitalization, over GBP 10 billion, tend to be stable, and pay dividends. Such stocks offer investors a slow, but reliable value appreciation.

On the other end of the spectrum are small companies, usually with a market capitalization lower than GBP 2 billion. These companies tend to appreciate in value pretty fast. However, they are equally volatile, and can crash as quickly as they gain.

For investors that want a middle-ground, mid-sized listed companies tend to offer a mix of stability and value appreciation.

The idea is to spread the risk as much as possible while also profiting from positive price movements in the market.

No-brainer UK Stocks to Buy In September: 

  • Glencore
  • Ashtead
  • DS Smith
  • Deliveroo
  • Argo Blockchain

 

Below are five no-brainer shares to buy in September. They are spread across multiple sectors of the economy and cut across large, medium, and small cap companies.

Glencore (GLEN) is a large cap company that makes a lot of sense to buy now. With a market capitalisation of GBP 44.33 billion, this basic materials company is one of the largest in its sector.

Its share price movements also paints a picture of stability. Year-to-date, it has been trending up slowly along the 50-day moving average. While it has not recorded any huge spikes, the price action is consistent.

Besides Glencore’s price stability, there is a lot going on with this company that has the potential to see it grow significantly going into the future.

For instance, Glencore is moving into the EV battery market, and this is a big deal. That’s because the auto industry is in the middle of a structural shift from the internal combustion engine to electric engines.  This means the market for batteries is only set to get bigger.

Glencore is moving into this market through its purchase of a stake in BritishVolt, a U.K based EV battery marker. BritishVolt is in the process of building a Gigafactory that has the capacity to make enough batteries for 300k cars a year.

That’s a huge portion of the fast-growing EV market that is set to get even bigger over the next decade. With the UK and most western nations set to phase out internal combustion engines by the 2040s, Glencore’s stake in BritishVolt could grow significantly.

The company is also a dividend payer, which makes it a top stock to hold for passive income. Back in July, the company announced that it would distribute $2.8 billion.

Glencore’s debt levels have also come down significantly over the past year. By the end of last year, its debt levels had dropped from $15.8 billion to $10.6 billion.

It has all the hallmarks of a large-cap stock that has the potential for long-term growth.

The housing market is booming

Ashtead (AHT) is another large-cap stock that makes a lot of sense to buy now. The company deals in general construction equipment, and with the UK construction market booming, this stock is set to record growth going into the future.

From its price action, its stability as a large-cap stock is quite evident. The stock has been trending up with minor dips over the past year. This means anyone who invested in this stock at the beginning of the year has enjoyed consistent returns, and with minimal drawdowns.

Besides its price action in the recent past, this stock’s prospects going into the future look pretty good.

While the construction market was given a boost by government subsidies during the pandemic, going forward, rising consumer demand is what will drive the real estate market going forward. This in turn presents a pretty good future for companies that supply construction, and home improvement products.

Ashtead’s books look pretty good as well and make it well-positioned to take advantage of the increase in demand that the post-pandemic real estate market presents.

The company’s current ratio of 1.17 means that it has more than enough current assets to cover its short-term debt obligations. This is especially important because there is a high likelihood of interest rates going up in 2022.   

For a company like Ashtead that is in a growing market, and has the resources to cover its debt obligations, fluctuations in interest rates may not have much of an impact on its operations.

The company’s cash flows are quite good too. Cash flows are among the most important metrics on the health of a company, and Ashtead is pretty strong on this front.

A combination of strong internal fundamentals and an economy that is on a rebound makes Ashtead a no-brainer stock to buy now.

E-Commerce is very promising at the moment

The UK e-commerce market is growing fast, making packaging company DS Smith (SMDS), a good stock to buy now. This company has a market capitalization of GBP 6 billion and offers a mix of growth, and stability.

It has positioned itself in the packaging space, which means companies looking to deliver products to their customers’ homes or offices need its services. This explains why it has partnerships with top e-commerce companies like Amazon.

DS Smith is also continually innovating to give customers the best products for their needs. The company recently announced that it was looking to transition to 100% recycled products by 2023.

Given that consumers are increasingly conscious of the carbon footprint of the products they buy, this transition could be a huge boost for DS Smith’s sales going into the future.

DS Smith’s books are healthy too, further cementing it as a company with the potential to deliver a mix of growth and stability in the long run.

One of its best metrics on this front is its cash flows. With cash flows of GBP 751 million, and leveraged free cash flows of GBP 273. 56 million, the company has the resources to carry out its operations without strain.

Its current ratio of 0.94 is within healthy levels too, especially now that the economy is on a rebound after the disruptions of 2020.

Deliveroo (ROO) is another e-commerce stock that makes for a good buy today.  At a market cap of GBP 6 billion, Deliveroo is a mid-cap company that has a mix of stability and growth.

The company has emerged as one of the most important players in the UK’s fast-growing deliveries market.

Deliveroo is also aggressively expanding its market, as is seen in its recent partnership with Boots. Through this partnership, Deliveroo will handle Boot’s deliveries for a select number of medical products.

Such partnerships are driving up Deliveroo’s market share, and by extension, its stock value long term.

Deliveroo’s books also paint a picture of a stable company, which is what one would expect from a mid-cap company operating in a growth market.

The company has a current ratio of 3.50, which means it has enough resources to repay its current debts multiple times over.

It also has positive cash flows, meaning it is sufficiently capitalized to handle its day-to-day operations. With the deliveries market getting even bigger every year, Deliveroo is a mid-cap stock that makes a lot of sense to have in a portfolio.

Exponential growth

A top small-cap stock to buy right now is Argo Blockchain (ARB). This company operates in the crypto industry, an industry that is set to completely transform finance and many other sectors of the economy.

Besides the long-term transformation that blockchain technology promises to bring, the rising prices of Bitcoin and other cryptocurrencies promise good tidings for companies like Argo.

This is quite evident in this company’s business update for August 2021. It stated that in August, it mined 206 BTC. Cumulatively, it has mined 1314 BTC in 2021, and with prices now back at over $50k gives the company a significant boost in revenues.

For context on how big of a boost this is, the company recorded an average mining margin of 86% in August. It sold 61 BTC in August at an average of $48,726 and made $2.95 million off it.

Given that crypto prices are on a strong rebound at the moment, one can expect that the revenues that this company generates from mining will only grow over time.

Argo’s books look pretty good too. The company has a current ratio of 1.84, which means it has enough resources to cover all its short-term liabilities.

Considering that crypto prices can fluctuate wildly, and at any moment, its strong current ratio gives it a strong cover in case prices drop.

The company’s cash flow position is good too. The best part is that if Bitcoin and other crypto prices keep gaining, then its cash flow position will only get better.

It’s a relatively small-cap stock that has the potential to give investors significant value growth going into the future.

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