Looking for the best shares to buy for 2021 in the UK? UK shares that brokers recommend as ‘strong buy’? Or perhaps undervalued UK shares that are about to boom? Look no further than our 10 top UK shares for 2021!
2021 will go down in the history books as a super interesting year for the UK shares market, no doubt.
A storm of different factors rained down on the UK in 2020 and made the shares market pretty chaotic. While the whole world was panicking over the coronavirus pandemic, the UK was still rushing to negotiate the terms of leaving the EU.
In the end, it made the UK shares market take some awkward tumbles here and there and scared off a lot of needed investment.
But the UK is still a lion when it comes to certain kinds of industries, most notably pharmaceuticals, finance and software. It takes pride in having some of the world’s biggest multinational companies based there.
And while many of these companies had a rough time in 2020, 2021 will likely be a year of recovery as they get back on their feet.
In this article, we’ll look at the best UK shares for 2021, covering 10 you should absolutely know. We’ll also cover how to buy UK shares and how to choose the best UK shares below too!
Top 10 Best UK shares for 2021!
Here’s our list of the 10 best UK shares for 2021:
- Just Eat
- Micro Focus International
- GW Pharmaceuticals
- Sage Group
- BT Group
- Lloyds Banking
You can buy all of these top stocks, as well as many others, at eToro and pay 0% fees!
How to choose the best UK shares for 2021?
Choosing the best UK shares for 2021 is tough. It requires a great deal of knowledge about the UK economy and an understanding of UK policies.
Further to that, you need to know the industries the UK is most known for. Particularly where they excel and where they fall short.
But when it comes to picking specific shares, there’s a lot to think about.
First and foremost, you want to make sure that you’re buying shares that have a chance of increasing in value.
Or, more specifically, shares that have a trend, meaning that they are moving in a clear direction.
But an upwards trend in price is not the only thing you should look out for, you also want to research other things related to the company’s growth, such as the revenue they are generating and other signals of growth like acquiring new subsidiaries.
And you should also define what really gives the company value. What makes it stand out from similar companies in the same industry? What does it offer consumers and clients?
Similarly, you need to look into their rivals - what chance do they have at overtaking this company? Does it seem plausible that investors may move from this company to one of their rivals?
But don’t forget to look into the negative factors as well. You also want to look into any debt the company might have, if they have made unrealistic promises and look into any controversial actions they may have made in the past.
In the end, it’s all about research and then your subjective opinion based on that research. What one trader believes to be a good share; another trader might believe to be bad.
The Best UK Shares To Buy For 2021:
1. AstraZeneca (AZN.L) - To reach £8,776.03 in a year?
If you’re wondering if it’s a good time to buy AstraZeneca shares, you’re in luck! Since July 2020, AstraZeneca’s share price has been slowly declining, making it easier for traders to buy shares.
Admittedly the situation can be somewhat confusing ‘hang on, why are AstraZeneca’s shares going down? Shouldn’t they be going up?’
Theoretically, yes, you’d expect that, but according to the Financial Times, the real reason AstraZeneca shares have been falling is because of concern over their acquisition of Alexion, another pharmaceutical company.
They explain that while financially there is a motive, but not much more information beyond that, which is creating an atmosphere of uncertainty.
However, despite this, it is still highly likely that when we see AstraZeneca start rolling out vaccines, it’s highly likely we may see improvement.
Looking at AstraZeneca’s share forecast, Wallet Investor predicts that within the next year, it will reach £8,776.03. This is a pretty handsome increase in the current price, potentially making AstraZeneca an excellent buy today.
Have you considered buying shares in AstraZeneca (AZN)?
2. Aveva Group (AVV.L) - Highs of £5,364 in the next 52 weeks?
Not to be confused with the insurance company Aviva, Aveva Group plc, is an information technology company from Cambridge. After a smack in the face from 2020, the share price looks like it’s starting to recover pretty nicely.
In fact, despite the rough year, according to Aveva’s annual report for 2020 (page 30), the company still managed to achieve revenue growth of 8.8% (or £833.8 million), which is excellent.
It’s also super important that shares traders look back at Aveva’s share price history. According to Yahoo Finance, this time last year, Aveva was hitting highs of £4,239.57, its highest ever.
And so, shares traders need to keep an open mind to the possibility of 2020 just being a minor hiccup and prices again could return back to this territory in 2021.
Aveva’s share price forecast also appears to be optimistic. MarketBeat suggests that Aveva could reach highs of £5,364 in their 52-week range.
So, in the end, it is highly likely that Aveva is a good share to buy.
Have you considered buying shares in Aveva (AVV)?
3. Just Eat (JE.L) - £100.50 per share upon the horizon?
Now here’s a great example of a company that relay boomed during the pandemic: Just Eat. Compared to many of the companies on this list Just Eat is pretty young, joining the London Stock Exchange in April 2014 with the ticker symbol JE.
Indeed, 2020 was the year of the deliveryman with people not able to head to restaurants throughout much of the year, they had no choice but to order in (if they didn’t want to cook for themselves, that is).
Just Eat’s market cap has since exploded reaching €13.49 billion, according to MarketWatch.
And according to Yahoo Finance, Just Eat’s share price history shows several highs and lows, reaching new highs of £10,050.00 in October 2020, and returned to £9,000 territory in January 2021.
Then looking at Just Eat’s share price forecast, MarketBeat estimates that it could reach a high of £100.50 per share in a 52-week period.
A crucial thing to remember is that Just Eat has several rivals in this industry, such as Food Panda, Deliveroo and Uber Eats, just to name a few.
Have you considered buying shares in Just Eat (JE)?
4. Micro Focus International (MCRO.L) - Target price of $19.34 for 2021?
Micro Focus International is a software and information technology company headed by CEO Stephen Murdoch and based in the small town of Newbury, south-west England.
If you’re wondering if you should buy Micro Focus shares, admittedly they haven’t been doing too well for the last three years, declining in value significantly in 2019.
However, since 2020 there have been signs of a growing upwards trend, which might make them a good short-term share to hold.
Looking at charts for one year, six months, and one month, there is definitely a positive movement upwards.
A super important thing we cannot ignore is that Micro Focus has a ton of subsidiaries, two of the most well-known include NetIQ and Serena Software.
And looking at Micro Focus’s share price forecast, CNN’s analysts believe that it could reach a high of $19.34 in the next 12 months, also recommending traders to hold.
Interestingly, WSJ Markets also estimates $19.34 per share as Micro Focus’s high target price.
Have you considered buying shares in Micro Focus International (MCRO)?
5. Ocado Group (OCDO.L) - Shares predicted to grow as much as 30.5%!
Founded by Jonathan Faiman and Tim Steiner, Ocado has done impeccably well since it undertook an initial public offering in 2010 on the London Stock Exchange.
Ocado initially started out as an online grocer in the early 2000s but has since then expanded to become a technology provider to other established supermarkets, such as Morrisons, and others around the world.
Acquiring a wide range of subsidiaries, Ocado also owns Jones Food Company Limited, Kindred Systems Inc, and several child companies that help Ocado operate.
Looking into Ocado’s share price forecast, the Financial Times says 16 of their analysts believe that the Ocado Group could reach a high of £3,460.00 in the next 12 months, which would be an increase of approximately 30.5%!
Ocado doesn’t seem to be slowing down at all and their shift from eCommerce grocer to software provider could massively improve the value of its shares in the coming years. All this makes Ocado shares a great buy right now.
Have you considered buying shares in Ocado Group (OCDO)?
6. GW Pharmaceuticals (GWPH.L) - Forecast to reach $1,102.884 over the next five years!
Buying shares in GW Pharmaceuticals might just be the cleverest thing you do! It’ll probably be the best performing share on our list for 2021!
GW Pharmaceuticals made its name by being the first-ever company in the world to gain approval to sell medication derived from cannabis plants (specifically nabiximols).
Since the approval of nabiximols in 2010, GW Pharmaceuticals shares have skyrocketed, and despite a few ups and downs, it has generally been moving upwards.
But perhaps the biggest upwards swing started gaining momentum in December 2020 and now the shares have reached their highest point ever, finally crossing beyond $200.
According to 10 analysts working for CNN, GW Pharmaceuticals share price forecast is a high of $220 for the next 12 months, which could be said to be very conservative.
Gov Capital is much more optimistic, giving GWPH a share prediction of $337.781498 for the next year and forecast of $1,102.884 for the next five years.
This all makes GW Pharmaceuticals definitely a good buy!
Have you considered buying shares in GW Pharmaceuticals (GWPH)?
7. Sage Group (SGE.L) - Increase of 29.2% in 12 months?!
Buying shares in Sage Group could be a real steal in 2021 with the Financial Times giving the Sage Group share price forecast of up to £780.00 in the next 12 months (an increase of 29.2%!).
For those that don’t know, the Sage Group is the UK’s second-largest tech company and focuses on ‘enterprise resource planning’ and has approximately 6.1 million customers with offices across the globe.
The multinational company has been around since the 1980s and the Sage Group now has several subsidiaries. Most recently, in 2018, they appointed Steve Hare as CEO.
Generally speaking, while Sage Group shares look quite choppy with large swings up and down, analysts are optimistic because of the growth of organic revenue, which was reported to be up to 1.4% or £447 million, as reported by Calum Muirhead of Proactive Investors.
And looking at Sage’s share price history, while it certainly has declined since a year ago, this is not too surprising as this is clearly an impact of the pandemic. (Yahoo Finance reported that the Sage Group was reaching highs of around £791.40 in February 2020.)
Have you considered buying shares in Sage Group (SGE)?
8. GlaxoSmithKline (GSK.L) - Undervalued as much as 30%? Great buy?
GlaxoSmithKline shares took a real pummelling in 2020 and lost a lot of value. However, more recently, many have come out suggesting that it may be dramatically undervalued. Seeking Alpha believes it may even be up to 30% undervalued.
Headed by CEO Emma Walmsley, GlaxoSmithKline may be at a major turning point in more ways than one.
First off, out of all the shares on this list, GlaxoSmithKline is the best hedge against AstraZeneca as GSK may also soon start producing their own coronavirus vaccine along with Sanofi.
However, in December 2020, GSK reported that there would be a delay in producing their vaccine, which is likely the reason behind its low share prices right now.
The second most interesting thing to look into is rumours GlaxoSmithKline might be subject to a takeover.
Back in 2015, it was rumoured that Roche and Johnson & Johnson were both interested in ‘bidding for the firm’. And if GlaxoSmithKline was ever in the position to be taken over, it would definitely be now.
You should definitely consider buying GlaxoSmithKline shares if you believe that it is undervalued and could rebound from its current lows. It could be an excellent buying opportunity.
Looking at GSK’s share price projection, MarketBeat believes that it could reach as high as £1,772.51 in the next 52 weeks.
Have you considered buying shares in GlaxoSmithKline (GSK)?
9. BT Group (BT.L) - Could taking a risk on 5G pay off?
Cutting straight to the case, the BT Group doesn’t look like the most appealing company to be buying shares in.
Arguably their best days are at best 20 years behind them and traders have been talking about a BT share collapse for a long time now.
And just like GSK above, the BT Group has also been subject to takeover rumours too. Seeking Alpha listed ‘poor historic management’ and ‘large debt and pension liabilities’ as key reasons for its ever-decreasing value.
According to Yahoo Finance, in February 2020, BT’s historical share prices were up to £157.66 at the highest.
But despite the rough history, prices might climb up tremendously because of 5G. That’s right, BT is a major player setting up the 5G network across the UK.
The main issue to look into now though is the replacement of the Huawei equipment that was originally used. If BT can pull this off, it may add great value.
Have you considered buying shares in BT Group (BT)?
10. Lloyds Banking Group (LLOY.L) - Handsome increase of 22.1% coming in 2021?
Lloyds is one of the few shares on this list that is actually doing better now than it was last year in 2020.
Now, despite this, no one can say for certain if Lloyds shares will recover to the level that they once were back in the late 90s and early to mid-2000s, but the slight improvement could still be a good sign.
According to Stuart Blair of Yahoo Finance, the biggest reason why Lloyds shares are so low right now is because of the pandemic, which led to a “share price fall of 42%”, and it is possible that as we move past the pandemic, share prices might recover.
On top of that, Lloyds share price forecast is predicted by CNN to reach a high of $2.47, a potential increase of 22.1%.
All this might mean Lloyds could be an excellent buy right now.
Have you considered buying shares in Lloyds (LLOY)?
Conclusion: What are the best UK shares for 2021?
That’s a tough question that really depends on what exactly you are looking for in the UK shares market.
2021 is no doubt set up to be an interesting year for the shares market, but not everything we have mentioned in our list will fit the kind of trader you are.
Some of the best shares in the UK right now are related to software and pharmaceuticals which could be areas you know a lot about or are areas you know nothing about.
You also need to consider the risk you are comfortable with. Shares traders with a high-risk appetite may be interested in the BT Group.
Traders interested in coronavirus vaccines should definitely look into AstraZeneca and GlaxoSmithKline. They may want to trade both or just stick to one.
While traders that focus on software must know about Sage, Ocado, Micro Focus and Aveva.
Ocado is a bit of an outlier there as it has more of a focus on retail. It could even be called an industry disruptor as its technology could give many supermarkets around the world an upper hand against their rivals, especially during the pandemic.
It is also quite easy to see how Ocado could grow as a company, while other software companies require more expertise to measure if they are worth trading.
In a similar vein, Just Eat may also continue to thrive in pandemic conditions, but they are not completely unique with several rivals in the same industry to contend with and perhaps need to offer up something different to stand out more.
Now while online shopping is booming, it’s not just because of the pandemic, it has been a rapidly growing industry in the UK for a long time with some UK companies leading the way globally.
And for traders looking for something very different, they can look into GW Pharmaceuticals, which will likely continue to keep making breakthroughs with medications from cannabis plants.
All in all, there is still a great deal of uncertainty over what might unfold over 2021.
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How can I buy UK shares?
Easy. Buying UK shares is a lot simpler today than it was in the past. As long as you have the following, you can get set up and trading in a matter of minutes:
- Valid identification.
- A sensible amount of money to trade.
- An internet connection.
- A willingness to learn.
If you want to buy UK shares in one of the companies listed above, you will need to use an online stock broker.
Step 1: Set up an account with a reputable broker
When we say, ‘reputable broker’, we mean one that is regulated! You can usually find this information at the very bottom of the broker’s page.
Typically, it will include the company’s full name, the organisation they are regulated by and their reference number.
Ideally, if you want to trade UK shares, you will want a UK-based broker because they will be able to offer you a more diverse range of UK shares and diversity is important if you want to profit and avoid risk.
And so, you should look for a broker that is regulated by the FCA (Financial Conduct Authority).
Don’t just go with the first broker you come across, research them and learn what they offer. Look at the different account types, the market access they provide, platform they use and educational materials.
And as a rule of thumb, ignore the bonuses and other glitzy stuff. What you really want is a solid broker that doesn’t have to offer you a bonus because it’s known to be good enough already.
Making decisions on such details may lead you to overlook more important things, such as fees and market access.
Once you’ve chosen a broker, you will need to set up an account and may need to submit some identification to prove who you are.
Ideally, even if your broker doesn’t request this at first, it is good to get this out of the way because you might need it to withdraw funds and it will be frustrating if they prevent you because you haven’t proven who you are.
Step 2: Make a deposit
Almost all brokers require you to make a deposit to finish setting up your account (though, some allow you to set up without a deposit).
Typically, they will have a minimum acceptable deposit which is typically not very much. Either way, you will want to deposit an amount that will allow you to trade effectively.
An important rule: don’t deposit money you need to survive! Keep that to the side. Only use money you are comfortable with losing if worse comes to worst.
Step 3: Research the shares you want to buy
While there is a high chance that you probably already know which shares you want to buy, it is important to have some goals set up in regards to when you should enter and exit the market.
To do this you need to learn about the shares’ history (note how we looked into that for all the shares listed in this article above) and identify what potential they have, which can then inform you when to get in and out of the market.
When you are finally ready to start trading with the shares you want to buy, it is super important that you have a risk management strategy in place.
A great rule that many traders stick to is only invest between 1-2% of your trading account (the money you deposited in the previous step) in any trade.
Why do this?
Because your trading account will last longer, you will mitigate risk and you will stand a greater chance of compounding your earnings.
Great! Now you’re finally trading UK shares!
If you remember anything from What Are The Best UK Shares To Buy For 2021: 10 You Must Know! make it these key points.
- The UK strong pharmaceutical, software and finance companies. Some of our best UK shares for 2021 are in these sectors.
- Many shares are still recovering from Brexit and the coronavirus. This has created some excellent buying opportunities.
- AstraZeneca and GlaxoSmithKline could both benefit tremendously from producing coronavirus vaccines. But there are other things to consider, such as production issues and unexplained acquisitions of other companies.
- In the end, it’s about what shares best suit you. You can of course trade anything you like, but it’s best to stick to what you know and understand.
Still not sure how 2021 will pan out for UK shares? Maybe these FAQs will help you.
Will the UK shares market survive Brexit?
Ever since the UK voted to leave the EU in 2016, the economy has never quite been the same.
But despite all the pessimism, the answer is still likely to be: Yes, the UK shares market will survive Brexit.
While things have changed quite dramatically for some businesses, inevitably the UK will survive Brexit, it will eventually move on.
Though many big businesses, particularly financial institutions, have left for mainland Europe, - Paris, Amsterdam, and cities around Germany - financial knowledge and know-how remain in the UK. Some of the biggest banks are still in the UK and London is still a major financial centre.
Even if the UK never reaches the financial prestige it used to have, UK shares will still be worth trading. They will still go up and down, they will not enter some dramatic downwards spiral that never ends.
In the end, it may be a process of ‘out with the old and in with the new’ as companies will either have to adapt to the change or fade away into the history books.
And aside from finance, the UK is still the leader in several different industries, particularly science and technology.
Perhaps the most glaring issue right now is exports and imports, which the UK is struggling with, but again, this will be resolved eventually as the UK learns to deal with it. Essentially, these kinds of issues are growing pains.
How will the coronavirus affect the UK shares market?
The UK has indeed been one of the worst-hit countries in Europe, with one of the highest death tolls in the world.
At the time of writing, according to Worldometer, the UK is the fifth-highest in terms of deaths, following on from the USA, Brazil, Mexico and India, which have much higher populations than the UK.
And this of course has harmed how the UK is perceived economically both inside and outside the UK.
According to the House of Commons Library:
“The magnitude of the recession caused by the coronavirus outbreak is unprecedented in modern times. UK GDP was 25% lower during the depth of the crisis in April 2020 than it was only two months earlier in February.”
When thinking about UK shares in the context of the coronavirus, there are two things to consider: 1) how the pandemic has affected industries and 2) the actions that the UK government takes.
Shares traders shouldn’t let the drop in prices scare them off. If you see that a company is doing worse off than it did a year ago, don’t take that as them failing or losing momentum.
Many shares are down from last year and not just in the UK! The pandemic really started to sink its teeth around March 2020, and so, of course, shares are not going to be back at the same level in February 2021.
Instead, you should think of the pandemic as a buying opportunity to get into shares that may have been too pricey before and wait for things to pick up again. This though requires a good deal of patience.
That said, also keep in mind that any stimulus packages the UK government implements could be a double-edged sword. While it may offer some temporary relief, it may end up devaluing the strength of the pound.
One event that will soon be on the horizon is the end of the furlough scheme which will come into effect at the end of March 2021.
But all that negativity aside, 2021 could be the rebound year, and if things work out, we may see a great movement upwards into 2022.