- Mixing both high-value stocks and growth stocks is a wise way of spreading the risk.
- Dividends are an essential factor if one intends to hold a stock for a long time.
Investing in the stock exchange is one of the best investment decisions one can make right now. To maximize profits, one should consider buying when the stocks are low, watching the market, then sell high.
If one wants to make a long-term investment, they should consider stocks that have strong fundamentals backing them up. They will not only grow your wealth, but one also stands a good chance of enjoying consistent dividends over time.
It is also important to consider the stock’s price action. While there is no wrong time to buy stocks, one should consider buying stocks that have dropped in value as the best option. If the fundamentals are strong, then the chances are that a good stock will rise in value when the market tide turns.
Overall, one should understand the companies they intend to buy shares from and the market conditions.
If one has £3000, there is a wide range of UK stocks to consider buying today. Here are a few of them:
- Entain (ENT)
- Ashtead (AHT)
- NatWest (NWG)
- Anglo American (AAL)
- Alpha FX (AFX)
Entain ENT is among the five explosive UK stocks one can consider buying now. It is a sports betting company based in the UK and has an interest in world sports.
Its stock has shown tremendous promise in the last one month and seems to be growing even higher. Exactly a month ago, Entain stock was trading at 1,863 GBP. At the time of writing, the stock was trading at 2,235 GBP, having risen 20% in the past month.
Being a sports betting company, one can expect this stock to rise in value, considering that the football season has just begun in Europe. Further, this season is bound to be bigger and more fun than the last. That’s because fans are back in the stadiums. All companies with a stake in sports, especially football, are set to make handsome profits.
From its charts, the company is doing quite well, too. In 2020, it recorded revenue of 3.562 billion EUR, an operating income of 529.5 million EUR, and a net income of 79.4 million EUR. Going by this, it will likely make much more, now that the sports season is bound to be bigger.
For a short-term investor, this stock is still ideal. The stock’s 52-week high price is 2,500 GBX, while its low for the same period is 838 GBP. That is a difference of 1662 GBP. Considering that the sports arena is getting busier this season, this stock could easily surpass its 52-week highs and make investors some good money in the short term.
Going long-term, this stock is perfect. It recorded an impressive growth of 221% in the last five years. With its fundamentals getting more robust, it will likely grow exponentially in 5 to 10 years.
The second UK stock to invest in 2021, is Ashtead Group. All indications show that AHT is going to rise exponentially in the next few years. Ashtead is a manufacturing company that deals with general construction equipment. It is based in London, UK, and is listed on the London Stock Exchange.
In the last month, this company's stock has gone up by 4.41%, and in the last year, it has risen by 111.64%. It has recorded a 52-week low of 2,719 GBP and a 52-week high of 6,284 GBP. At the time of writing this article, the stock was trading at 5,820 GBP. In 2020, it recorded revenue of £4.606 billion and a net income of £739.7 billion.
So why should one buy this stock? According to data from the UK construction industry, the residential market has been growing strongly in the last 12 months. Government subsidies to potential home buyers have fueled this growth and, by extension, the fortunes of companies involved in it.
While this stock will not give the best dividend yield, one can expect it to grow in value going forward. That’s because aside from the pandemic subsidies, UK consumer demand is expected to grow as the market opens up.
In the short term, the stock could also make investors good returns if its stock growth rate is anything to go by. It survived the pandemic quite well, and with demand on the rise, things could get better.
NatWest Group is a state-owned British banking and insurance holding company. Its services include private and business banking, corporate finance, and insurance. It issues banknotes in Northern Ireland and Scotland.
In the past year, this company has recorded an impressive 30.23% growth in value and is still growing. The stock is currently trading at 206.8 GBP, up by 6.41% in the last six months.
In 2020, NatWest recorded £10.8 billion in revenue, with a net income of £0.434 billion and an operating income of £0.351 billion. It has a dividend yield of 2.90%, so one can expect to earn a sustainable passive income off it going into the future.
So, is this a good stock to buy in 2021? This stock is a good investment both in the short and long term. Its price-to-earnings ratio (P/E ratio) is a bit high at 14.13, but it could be that investors are willing to buy more of this stock hence increasing its demand. If its demand remains high, it is likely to hit higher prices both in the short and long term.
Its charts indicate that it is on an upward trajectory too. Keep in mind that the UK government owns a 54.8% stake, which gives this company more credibility and market advantage.
Yet another reason to consider buying this stock is the probability that the price of copper is going up due to increased post-pandemic demand. A report by the Bank of America notes that the supplies of copper are dwindling hence the increase in demand. As such, one can expect growth going forward.
Anglo American (AAL)
The fourth company in the list of top uk stocks to invest £3,000 is Anglo American. This establishment is a British multinational mining company involved in the production of platinum, diamonds, copper, iron ore, and nickel. It is the largest producer of platinum globally, producing about 40% of the total world output.
In 2020, AAL recorded revenues of $30.9 billion, an operating income of $6.87 billion, and a net income of $3.33 billion. Its dividend yield is 7.20%, meaning that one can expect a good dividend on every stock they own at the end of the year.
With the stock is trading at record highs, it still has a lot of potential going forward. The company has a primary listing in the London Stock Exchange and a secondary one at Johannesburg Stock Exchange. Being listed in two markets is an advantage to the stock in terms of liquidity, and consequently, its price.
Looking at its charts, this seems like a stock that has the potential to give investors handsome profits. In the last five years, the company has had an impressive growth of 161.35%. If the mining market maintains its current uptrend, this stock could go above its 52-week high.
Alpha FX (AFX)
The fifth stock to consider is Alpha FX. Based in London, UK, Alpha FX is a technology company that specializes in fintech solutions for collections, international payments, and risk management. Just recently, Alpha announced an increase in revenues by 31% to £46.2 million. Its chart also shows that the company grew by 114% in the last year.
While this stock does not have an attractive dividend yield at 0.5%, it is still a good buy considering its projected growth. The current price for this stock is 2,210 GBP. You can get a couple of this stock, add them to your portfolio, and watch them long-term.
This stock is also good if you want to invest for the short term. The stock recorded a 52-week high of 2,340 GBP and a low of 960 GBP. In the last month, this stock has gained 29%. If it maintains this trajectory, it probably will surpass its current 52-week high. All indications show that it will go beyond this target.
As a rule of thumb, always do enough research before investing. While stocks are a low-risk investment, one could still make a loss if the stocks they buy decline in value. With a good understanding of the market, one can spread this risk and earn a reasonable profit.
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