Stock market recovery: 8 UK shares I’d buy in 2021 for the new bull market

Royston Wild
·3-min read
The UK national flag in front of Canary Wharf skyscrapers where professionals trade shares for a living.
The UK national flag in front of Canary Wharf skyscrapers where professionals trade shares for a living.

Improving news flow surrounding a Covid-19 vaccine has boosted hopes of a UK share price fightback in 2021. I kept investing in my Stocks and Shares ISA this year to make money during the eventual bull market. This new stock market rally might come around sooner than many had expected.

I recently explained why media companies and life insurance providers could rebound strongly in 2021. Here are more UK shares that could soar in value during the stock market recovery too:

#1: Aviation-focussed UK shares to soar again

Covid-19 lockdowns and travel restrictions have been devastating to the aviation industry. A huge number of UK shares have sunk in value as their fleets have been grounded. Dozens of airlines have even gone to the wall and more could follow before 2020 is out.

News of a coronavirus vaccine leads to hopes that the aviation industry could bounce back strongly in 2021. And my favourite buys for this recovery are Ryanair and Wizz Air Holdings. Both UK shares have the scale and the balance sheet strength to make the most of this recovery. Their strong financial bases should also provide a margin of safety should the rollout of Covid-19 vaccines experience a hiccup.

An improved outlook for commercial airlines like these bode well for engineers like Rolls-Royce and Meggitt too. The former of course is most famous for building plane engines, while the latter supplies a variety of components like brakes, sensors, and fuel systems.

I’d also invest in Signature Aviation to ride the new bull market. This UK share provides refuelling, ground handling, inspection and hangar services to business and general aviation customers in 370 locations all over the globe.

#2: Clothes retailers to enjoy explosive profits growth

Fashion sales have taken an almighty whack in 2020 as Covid-19 smacked workplace attendances and social gatherings. Latest Office for National Statistics data showed sales values at British clothing retailers fall 14% year on year in October.

A breakthrough on the vaccine front will guarantee a strong rebound in clothes sales in 2021, though. Fashion retailers could enjoy a bumper year too on strong pent-up demand and shoppers using the savings they’d accrued during 2020’s lockdowns to replenish their wardrobes.

JD Sports Fashion is one UK share I think could enjoy a profits resurgence next year. It is at the cutting edge of the fast-growing sports leisure segment. And it has a broad European network and sophisticated online operation to allow it to capitalise on improving consumer spending. I’d buy Boohoo and ASOS to ride this phenomenon.

An end to Covid-19 lockdowns aren’t the only reason these UK shares could thrive next year. Signs that Arcadia is about to go bust provides them with another reason to be optimistic. Firstly, it will remove some of the high street’s most popular brands like Topshop and Miss Selfridge. The retail giant’s likely breakup will present some attractive acquisition possibilities that could boost earnings in the near-term and beyond too.

The post Stock market recovery: 8 UK shares I’d buy in 2021 for the new bull market appeared first on The Motley Fool UK.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended ASOS, boohoo group, Meggitt, Signature Aviation, and Wizz Air Holdings. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Motley Fool UK 2020