UK shares are booming again as the FTSE recovers! Here’s what I’m watching

The UK stock market is back in full swing, with the FTSE 100 up 6% in the past month. As tariff fears subside, many UK shares have posted double-digit gains since early April. International Consolidated Airlines is up a massive 30%, Carnival has soared 25% since early April, and Standard Chartered is up 18%.

But I don’t want to buy shares that have already made their best gains. I’m looking for the laggards that might catch up with the market in the coming months. To do that, I’m checking for high-quality stocks with low price-to-earnings (P/E) ratios.

Here are two potential winners that I think could do well in the coming years.

Barclays

Barclays (LSE: BARC) is up only 6.8% in the past month and has an impressively low P/E ratio of 8.4. That suggests lots more room for growth.

But what I really find attractive is its financials. The popular high street bank posted a tidy £5.32bn net income for 2024, up 24% from the previous year, with revenues hitting £24.3bn. Its investment banking arm pulled its weight with the purchase of Tesco Bank, a strategic move that’s set to increase its market share.

On the downside, its rapid growth over the past year has diminished its yield. Once a lucrative dividend payer, it’s now only returning 2.65% on each share. Still, not bad for that stock that’s up 47.6% since this time last year.

It’s also got a hefty debt-to-equity ratio of 1.47 — a figure that should ideally stay below one. Plus, its non-performing loans have ticked up slightly to 2.4%. This means if the economy takes a nosedive or interest rates wobble, things could get bumpy.

Scottish Mortgage

Scottish Mortgage Investment Trust (LSE: SMT) is another stock that looks set for gains this year. Even though it’s up an impressive 10% in the past month, it still has a low P/E ratio of only 7.1.

The fund invests largely in popular US tech stocks like ASML, Tesla, Nvidia, and Amazon. However, it also has an adequate amount of diversification into other sectors like pharmaceuticals and e-commerce.

In its latest annual results, it posted a net profit of £1.37bn, bouncing back from a loss of £2.92bn the year prior. Plus, it’s trading at a discount of about 11% to its net asset value (NAV), which could be a bargain for savvy investors.

A key risk is the concentration in US tech, which could lead to significant losses if an economic slowdown hurts this sector. Plus, with a broad exposure to private companies and emerging markets, it takes on an added layer of complexity and risk.

Anything else?

Besides the above two stocks, I also like the look of the energy giant SSE and the student accommodation builder Unite Group. Both are yet to rally this year and have low P/E ratios and P/E growth (PEG) ratios.

When markets are rallying, it pays to hunt for stocks with strong earnings and low prices. The longer these stocks buck the trend, the bigger the boost could be when it comes. As always, in-depth market research and a diversified portfolio are key.

The post UK shares are booming again as the FTSE recovers! Here’s what I’m watching appeared first on The Motley Fool UK.

5 stocks for trying to build wealth after 50

The cost of living crisis shows no signs of slowing… the conflict in the Middle East and Ukraine shows no sign of resolution, while the global economy could be teetering on the brink of recession.

Whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times. Yet despite the stock market’s recent gains, we think many shares still trade at a discount to their true value.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. We believe these stocks could be a great fit for any well-diversified portfolio with the goal of building wealth in your 50’s.

Claim your free copy now

More reading

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Mark Hartley has positions in Scottish Mortgage Investment Trust Plc. The Motley Fool UK has recommended ASML, Amazon, Barclays Plc, Nvidia, Standard Chartered Plc, and Tesla. 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.