For someone looking to invest GBP 5000 in the stock market today, there are multiple approaches they can take.
These range from technical analysis to searching for fundamentally strong stocks that have tanked recently.
While all these strategies can work, one of the best ones is to look at industry growth trends. That’s because it is the industry prospects that drive the fundamentals of individual companies.
Besides, when you focus on industry trends, it becomes pretty easy to have a bigger picture of the economy and where it is going.
The key industry trends that will anchor this article are e-commerce and post-pandemic advertising. Consumer trends have been pointing to digital commerce growth for years now.
However, it is the onset of the COVID-19 pandemic that accelerated the move to e-commerce.
In 2020, UK e-commerce sales shot up by 30%, and this figure is growing as work-from-home becomes the norm. Due to the need for more digital visibility, the demand for online advertising services is on the rise too.
A report by PWC shows that in 2020, digital ad spending in the UK grew by 5% to hit GBP 16.5 billion.
Essentially e-commerce and advertising are intertwined, and the structure of the UK economy at the moment points to their potential growth.
So, what would be the ideal way to invest GBP 5000 in top UK growth stocks today?
Top UK Shares to Invest in
While there is no foolproof way to spread GBP 5000 across UK stocks, it is prudent to have a portfolio of at least three stocks that could benefit from the growth of e-commerce and digital advertising.
When most people think about e-commerce and the digital economy in general, the first thing that comes to mind is companies that sell products online. However, online communication companies are a massive part of the digital economy. Communication companies like Informa (INF) are set to benefit immensely from the fast-growing digital economy.
This company makes it possible for businesses to create virtual exhibitions for their products, and that’s huge when it comes to driving sales.
Besides operating in a fast-growing market, this company’s internal fundamentals are pretty good too.
Informa recently raised its revenue targets for 2022. It is banking on live exhibitions growth in China and the US. It expects revenues to be in the GBP 1.8 billion range, up from an earlier projection of GBP 1.7 billion.
With such positive projections for the year, INF is a stock that is likely to perform pretty well going forward.
JD Sports (JD)
JD Sports (JD) is also a worthy stock to have in a GBP 5000 UK shares portfolio. The company sells branded sportswear online, and this is a fast-growth market. The European football season that starts this week will be a huge boost to its sales in the short term.
Sales are likely to be boosted because this is the first time in over a year that football fans are being allowed to the stadiums, hence adding to the excitement around the sport.
The company’s revenues are also likely to get a boost from the acquisition of a US athletic apparel company a few months ago.
It is also noteworthy that JD stock has been on an exponential growth path for over a year now.
This means it is on the radar of many investors. With the potential for revenue growth high, buying momentum is likely to rise going forward. It’s an FTSE 250 company worth having in a UK Shares portfolio.
An advertising giant
Companies operating in the digital economy need to stay on the cutting edge of advertising. Otherwise, they would fade out under competitive pressure.
WPP (WPP) is on the cutting edge of advertising and has positioned itself for growth in the digital economy.
In June, the company was named the most creative at the 2021 Cannes Lion International Festival of Creativity.
Besides investing in creative content generation, the company is getting into partnerships that will grow its market share.
Back in May, it partnered with Microsoft to transform content on the cloud. This is the first of a kind set to revolutionize content creation for advertising in a virtual environment.
The initiative was triggered by the COVID-19 pandemic but is now set to become a mainstay as advertising goes digital.
According to its CEO Mark Read, this move will help the company draw in the best talent in the advertising industry by giving them the most advanced tools that the market has to offer.
Such factors are likely to play an instrumental role in the growth of this company going into the future.
They put it right in the middle of the growing UK digital economy in terms of helping companies come up with creative adverts that can drive their market campaigns.
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