In this article, we discuss the 11 best UK stocks to invest in now.
The United Kingdom economy is experiencing some pains right now, with inflation hurting the purchasing power of consumers across the country. Households have faced the biggest cost pressures since the 1950s, and in April the average energy bill saw an increase of £700 a year. The economic recovery from Covid-19 was derailed as Russia’s invasion of Ukraine upended energy prices in Europe and across the world. PricewaterhouseCoopers (PWC) sees the United Kingdom heading towards the risk of a recession, and revised its projected economic growth to 3.8% for the year, down from estimated figure of 4.5% before the Russia-Ukraine crisis. The imposition of financial sanctions on Russia have resulted in the addition of one percentage point to PwC’s inflationary outlook for UK, and the world’s second largest professional services firm now sees the country’s inflation reaching a record of 8.4% in the second quarter of 2022. In order to provide relief to the public, the government introduced a fuel duty cut of 5p per liter in late March, but fuel prices still remain high.
However, the first quarter of 2022 also recorded some positives for the 6th largest economy in the world. Complete removal of Covid restrictions granted some support to the services sector. The economy recorded consecutive monthly growth in January and February 2022, and job vacancies were at a record high as employment growth picked up as well.
In these interesting times where an investor’s optimism and pessimism could go hand in hand, it would be wise to know which UK stocks are worth buying, which include AstraZeneca PLC (NASDAQ:AZN), Shell plc (NYSE:SHEL) and Vodafone Group Plc (NASDAQ:VOD), along with others mentioned below.
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Let’s go ahead and take a look at our list of the 11 best UK stocks to invest in now.
Our Methodology
We picked 11 UK stocks with positive analyst ratings, growth prospects, and solid business fundamentals. Data from 924 elite hedge funds tracked by Insider Monkey at the end of the fourth quarter was used to identify the number of hedge funds that hold positions in each firm.
Best UK Stocks To Invest In Now
11. Barclays PLC (NYSE:BCS)
Number of Hedge Fund Holders: 11
Barclays PLC (NYSE: BCS) starts off our list of the best UK stocks to buy now. The London-based banking firm offers a range of financial services around the world including credit cards, retail banking, investment banking, wealth management, and asset management services.
Out of all the hedge funds tracked by Insider Monkey during the fourth quarter of 2021, 11 reported bullish bets on Barclays PLC (NYSE: BCS) with combined stakes worth $86.8 million. In comparison, 12 hedge funds were long on the company shares a quarter ago. Atlanta-based Masters Capital Management was the largest shareholder of Barclays PLC (NYSE: BCS) in Q4 2021 with a stake worth roughly $41 million.
Citi analyst Andrew Coombs on April 22 upgraded Barclays PLC (NYSE: BCS) to ‘Buy’ from ‘Neutral’ and set a price target of £225. He sees sees a sustainable RoTE (return on tangible equity) of about 8% for the banking firm which he thinks suggests upside to the current multiple.
For 2021, Barclays PLC (NYSE: BCS) reported full-year net profit of £6.38 billion, which was above analysts’ expectations of £5.75 billion. In comparison, the firm posted £1.53 billion net profit in 2020, showing a marked improvement as its investment banking and corporate divisions reported strong growth.
In addition to AstraZeneca PLC (NASDAQ:AZN), Shell plc (NYSE:SHEL) and Vodafone Group Plc (NASDAQ:VOD), Barclays PLC (NYSE: BCS) is on the radar of institutional investors.
10. Global Ship Lease, Inc. (NYSE:GSL)
Number of Hedge Fund Holders: 17
Then there’s Global Ship Lease, Inc. (NYSE:GSL), a London-based shipping firm which owns a fleet of 65 mid-sized and smaller containerships that it leases under under fixed-rate charters to container shipping companies. The Covid pandemic led to a boom in global shipping prices, and the Russian invasion of Ukraine has led to a similar spike in shipping rates. As of April 29, Global Ship Lease, Inc. (NYSE:GSL) has gained 51.19% in the last 12 months.
On March 3, B. Riley analyst Liam Burke raised the firm’s price target on Global Ship Lease, Inc. (NYSE:GSL) to $38 from $33 and reiterated a ‘Buy’ rating on the company shares.
Global Ship Lease, Inc. (NYSE:GSL) reported its fourth quarter earnings on March 2, and disclosed an EPS of $1.84, which beat analysts’ estimates by $0.58. Revenue for the quarter grew an astounding 119.42% year on year to come in at $153.53 million, also outperforming estimates by $28.50 million.
As of the fourth quarter, 17 out of 924 elite hedge funds tracked by Insider Monkey held positions in Global Ship Lease, Inc. (NYSE:GSL) with a combined value of $149.9 million. This shows a positive trend from the quarter before, where 14 hedge funds were bullish on the company shares. The most prominent shareholder in the company during Q4 2021 was Whitefort Capital, which held a stake worth more than $22 million.
Investment firm Massif Capital talked about many stocks in its Q4 2021 investor letter, and Global Ship Lease, Inc. (NYSE:GSL) was one of them. Here’s what the fund said:
“We initiated a 6% position in GSL, bringing total maritime transit exposure up to ~9% of the portfolio when combined with our 3% SBLK position. GSL is a containership owner, leasing ships to container companies (such as a Maersk) at fixed rates. As owners, they own and manage the vessels (responsible for crews, maintenance, insurance) but do not have fuel costs. GSL focuses on mid-size to smaller containerships, which serve the faster-growing inter-regional trade routes that represent ~70% of global containerized trade volume.
As they own its containers, their business is both pro-cyclical (chartered tonnages used as growth platform by liner shipping companies) and counter-cyclical (with the sale and lease-back structures used by liner companies as a balance sheet management tool). GSL has a track record that includes both organic acquisitions and a strategic combination in Q4 2018 that doubled the size of the fleet.
We like GSL because they do not have as much operational leverage as a company like ZIM (which leases on both sides of the trade), and they sign 2–5-year contracts. Liners have been eager to secure that capacity for extended durations spanning multiple years, significantly longer than has been the case historically and well-aligned with GSL’s strategic preference to lock in value over time and provide forward visibility on cash flows…” (Click here to see the full text)
9. Vodafone Group Plc (NASDAQ:VOD)
Number of Hedge Fund Holders: 17
Vodafone Group Plc (NASDAQ:VOD) is another UK stock that is on the radar of investors. The telecommunications giant offers mobile, broadband and TV services to millions of customers across Europe and Africa.
In April, UBS analyst Polo Tang kept a ‘Buy’ rating on the company shares, and revised the firm’s price target to £147 from £157.
17 hedge funds reported bullish bets on Vodafone Group Plc (NASDAQ:VOD) shares in the fourth quarter of 2021, with a total value of roughly $538 million. Jim Simons’ Renaissance Technologies held more than 26 million shares of the firm at a value of $388.9 million, making it the top shareholder of the firm in Q4 2021.
In 2021, Vodafone Group Plc (NASDAQ:VOD) posted an annual revenue of $51.17 billion, which was a 2.32% increase from its revenue of $50.01 billion for 2020. As of May 4, the firm offers an impressive yield of 6.66%.
8. Rio Tinto Group (NYSE:RIO)
Number of Hedge Fund Holders: 22
Rio Tinto Group (NYSE:RIO) mines, explores for and processes natural minerals around the world, which include gold, aluminum, copper, diamonds, and iron ore. The firm is a well-known dividend stock offering high yields, with its dividend standing at 11.44% as of May 4.
Citi analyst Ephrem Ravi on April 20 upgraded Rio Tinto Group (NYSE:RIO) to ‘Buy’ from ‘Neutral’, and revised the price target to £70 from £59. The analyst raised iron ore price forecasts and subsequently upgraded the firm’s earnings forecasts for 2022 and 2023.
Ken Fisher’s Fisher Asset Management was the leading shareholder of Rio Tinto Group (NYSE:RIO) at the end of the fourth quarter of 2021, and increased its stake by 2% over the previous quarter to consist of 13.55 million shares worth $907.2 million. In total, 22 hedge funds were long Rio Tinto Group (NYSE:RIO) at the end of the fourth quarter with combined stakes worth $1.83 billion. This is up from 20 hedge funds a quarter ago with $1.33 billion worth of positions in the company.
7. BP p.l.c. (NYSE:BP)
Number of Hedge Fund Holders: 26
Up next on the list of best UK stocks to buy now is BP p.l.c. (NYSE:BP), a London-based energy firm which offers biofuels, natural gas, and de-carbonization solutions and services, along with solar and wind power generation facilities.
On April 29, JPMorgan analyst Christyan Malek raised the firm’s price target on BP p.l.c. (NYSE:BP) to £500 from £480 and maintained an ‘Overweight’ rating on the company shares. On April 18, BP p.l.c. (NYSE:BP) entered into a multi-year contract with Tritium DCFC (NASDAQ:DCFC) to support its global electric vehicle (EV) charging station network which includes chargers and other related services. The initial order is for the UK, Australia and New Zealand markets of just under 1,000 chargers.
As of the end of the fourth quarter, 26 out of 900+ elite hedge funds tracked by Insider Monkey held positions in BP p.l.c. (NYSE:BP) with a combined value of $1.2 billion. In comparison, 29 hedge funds held combined stakes worth $1.05 billion in the energy firm a quarter ago. Ken Fisher’s Fisher Asset Management was the largest shareholder of BP p.l.c. (NYSE:BP) in Q4 2021 with 13.7 million shares valued at more than $367 million.
BP p.l.c. (NYSE:BP) released its first quarter results on May 5, and disclosed an EPS of $1.92, which beat estimates by $0.55. Revenue of $49.26 billion for the quarter was up 42.6% year-on-year, but fell below estimates by $3.94 billion. After the publishing of its quarterly earnings, shares of BP p.l.c. (NYSE:BP) rose 8.04% in a single day as of May 4.
6. Cushman & Wakefield plc (NYSE:CWK)
Number of Hedge Fund Holders: 27
Cushman & Wakefield plc (NYSE:CWK) is a London-based firm which provides commercial real estate services in the US, UK, Australia and around the globe. Its list of services include property management services, strategic consulting services, portfolio administration and transaction management.
For the fourth quarter, Cushman & Wakefield plc (NYSE:CWK) disclosed earnings per share of $0.94, beating consensus estimates by $0.31. $2.88 billion in quarterly revenue signaled an increase of 26.9% year-on-year and also surpassed analysts’ expectations by $223.2 million.
On April 5, Goldman Sachs analyst Chandni Luthra initiated coverage of Cushman & Wakefield plc (NYSE:CWK) with a ‘Buy’ rating and a price target of $25. Luthra holds that the firm is well positioned to help guide its clients through a constantly volatile office landscape, and forecasts strong revenue growth in the brokerage business with an improving margin profile. Cushman & Wakefield plc (NYSE:CWK) in April acquired Perth-based Sheffield Property and Sheffield Asset Management, which is an office leasing and property management agency. This deal will help improve the Cushman & Wakefield plc’s (NYSE:CWK) commercial real estate platform in Australia and across the Asia Pacific region.
Hedge funds were seen buying up on Cushman & Wakefield plc (NYSE:CWK), as 27 hedge funds reported owning stakes in the firm at the end of the fourth quarter, in comparison to 24 hedge funds a quarter ago. The total Q4 hedge fund holdings in the firm stood at more than $286 million. The largest shareholder of Cushman & Wakefield plc (NYSE:CWK) was Harris Associates, which held a $130.2 million stake in the company at the end of the fourth quarter.
Investment firm Vulcan Value Partners talked about Cushman & Wakefield plc (NYSE:CWK) in its Q4 2021 investor letter. The fund said:
“Cushman & Wakefield plc was a material contributor during the quarter. The company is a global commercial real estate services firm that runs a highly diversified, asset-light business. During the quarter, Cushman and Wakefield reported strong earnings, increased fee revenue and margins, and increased its guidance. After being negatively impacted from the global pandemic, Cushman and Wakefield’s business is rebounding strongly. This great business benefits from scale, secular tailwinds, and is run by shareholder-oriented management with strong ownership.
Just like AstraZeneca PLC (NASDAQ:AZN), Shell plc (NYSE:SHEL) and Vodafone Group Plc (NASDAQ:VOD), Cushman & Wakefield plc (NYSE:CWK) is one of the best UK stocks to invest in now.
5. Ferroglobe PLC (NASDAQ:GSM)
Number of Hedge Fund Holders: 28
Ferroglobe PLC (NASDAQ:GSM) is up next on our list of the best UK stocks to buy now. The firm provides specialty and silicon chemicals to a range of industries such as steelmaking, electronics, healthcare and personal care products.
Of the 924 hedge funds tracked by Insider Monkey, 28 held stakes in Ferroglobe PLC (NASDAQ:GSM) at the end of the fourth quarter with a combined value of $273.4 million. This shows growing investor confidence over the previous quarter where 24 hedge funds held $304.7 million worth of positions in the company.
On February 14, Seaport Global analyst Martin Englert initiated coverage of Ferroglobe PLC (NASDAQ:GSM) with a ‘Buy’ rating and set a $16 price target. The analyst sees the “historic run” in silicon and ferroalloys prices resulting in substantial improvement for the firm’s EBITDA and free cash flow in 2022. As of May 4, shares of Ferroglobe PLC (NASDAQ:GSM) have gained 56.67% in the last 12 months, and 2.49% in the year to date.
4. GlaxoSmithKline plc (NYSE:GSK)
Number of Hedge Fund Holders: 36
Then there’s GlaxoSmithKline plc (NYSE: GSK), a British pharmaceutical company founded in 1715 which offers a range of vaccines, medicines and health-related consumer products around the globe. As of May 4, GlaxoSmithKline plc (NYSE: GSK) has recorded a 19.44% jump in share price in the last 12 months, and an increase of 4.16% in the last 6 months.
On April 29, Barclays analyst Emily Field raised the firm’s price target on GlaxoSmithKline plc (NYSE: GSK) to £1,800 from £1,775 and maintained an ‘Equal Weight’ rating on the company shares.
GlaxoSmithKline plc (NYSE: GSK) in April said it expects a similar level of sales from its COVID-19 solutions in 2022 as in 2021, as a result of known binding agreements with governments. However these sales will be at a lesser profit contribution owing to increased sales of lower margin drug Xevudy.
For the first quarter of 2022, GlaxoSmithKline plc (NYSE: GSK) posted an EPS of $0.83, which beat estimates by $0.06. $12.27 billion in quarterly revenue signaled a jump of 18.6% from the year-ago quarter and also surpassed estimates by roughly $639 million.
Investor confidence in GlaxoSmithKline plc (NYSE: GSK) recorded an uptick at the end of the fourth quarter of 2021, where 36 hedge funds were long on the company shares, as opposed to 31 hedge funds a quarter earlier. Fisher Asset Management held a stake in GlaxoSmithKline plc (NYSE: GSK) exceeding $803 million in Q4 2021, making it the top shareholder of the firm.
3. Shell plc (NYSE:SHEL)
Number of Hedge Fund Holders: 41
With a market cap of more than $207 billion, Shell plc (NYSE:SHEL) is one of the largest energy firms in the world. As the globe gradually shifts towards green energy, Shell is well-positioned to continue its dominance in the market given its sizeable investments towards green initiatives. As of May 4, Shell plc (NYSE:SHEL) has recorded a 44.17% jump in share price in the last 12 months, and 24.09% in the last 6 months.
On April 19, JPMorgan analyst Christyan Malek maintained an ‘Overweight’ rating on Shell plc (NYSE:SHEL) shares and raised the firm’s price target to £2,850 from £2,700.
For the fourth quarter of 2021, Shell plc (NYSE:SHEL) posted revenue of $85.28 billion, which beat estimates by $26.62 billion and registered an increase of 93.87% year-on-year. EPS stood at $1.66, also exceeding analysts’ forecasts by $0.41.
Out of all the hedge funds tracked by Insider Monkey, 41 reported bullish bets on Shell plc (NYSE:SHEL) in Q4 2021 with aggregate stakes worth $2.63 billion. This shows a positive trend from the quarter before where 33 hedge funds held $2.05 billion worth of positions in the energy firm.
Goehring & Rozencwajg Associates, an investment firm, talked about many stocks in its Q3 2021 investor letter, and Shell plc (NYSE:SHEL) was one of them. Here is what the fund said:
“Royal Dutch Shell’s ESG challenges continue unabated. A Dutch court ruled in May that Shell plc (NYSE:SHEL) must cut its CO2 output by 45% by 2030 to align their policies with the Paris Climate Accord. In a statement issued after the verdict, a Shell plc (NYSE:SHEL) spokesperson acknowledged that “urgent action is needed on climate change and the company is accelerating efforts to reduce emissions.” If the pressure from the Dutch court system was not enough, an activist shareholder has proposed breaking the company apart to address ESG concerns. On October 27th, Third Point Management announced the following.
“If Shell plc (NYSE:SHEL) pursues this type of strategy it would probably lead to an acceleration of carbon dioxide reduction. […] Breaking Shell into two operating units would create a standalone legacy energy business (upstream, refining, and chemicals) that could slow capex beyond what is has already promised, sell assets, and prioritize return of cash to shareholder which can be reallocated into low-carbon areas of the market.”
2. AstraZeneca PLC (NASDAQ:AZN)
Number of Hedge Fund Holders: 42
AstraZeneca PLC (NASDAQ: AZN) is up next on our list of the best UK stocks to buy now. It is headquartered in Cambridge, United Kingdom and develops a range of pharmaceutical products used around the globe. The firm is also the manufacturer of one of the most well-known Covid-19 vaccines available for use around the world, and boasts an impressive pipeline of approved or under-trial drugs that bode very well for its future prospects.
Morgan Stanley analyst Mark Purcell on April 21 raised the firm’s price target on AstraZeneca PLC (NASDAQ:AZN) to £11,100 from £10,200 and maintained an Overweight rating on the company shares. As of May 4, shares of the firm have jumped 24.49% in the last 12 months and 12.97% in the year to date.
42 hedge funds reported holding stakes in AstraZeneca PLC (NASDAQ:AZN) at the end of the fourth quarter, up from 41 hedge funds a quarter ago. The largest Q4 2021 stakeholder in the biopharmaceutical firm was Fisher Asset Management with a $1.17 billion stake consisting of more than 20 million shares.
1. Linde plc (NYSE:LIN)
Number of Hedge Fund Holders: 45
Linde plc (NYSE:LIN) ranks first on our list of the best UK stocks to buy. It is the largest industrial gas producer in the world, and offers atmospheric gasses to a range of industries such as energy, manufacturing, healthcare, food, and chemicals, among others. The company has long-term contracts with clients around the world with clauses for inflation protection, and is set to enjoy steady growth as climate change concerns and the Russia-Ukraine crisis increases demand for its products.
On April 5, UBS analyst Andrew Stott maintained a ‘Buy’ rating on Linde plc (NYSE:LIN) shares, and raised the price target to €345 from €335.
For the first quarter of 2022, Linde plc (NYSE:LIN) posted an EPS of $2.93, which was above consensus estimates by $0.16. The company raked in $8.21 billion in revenue for the quarter, outperforming estimates by $73.3 million.
As of the end of the fourth quarter of 2021, 45 hedge funds held positions in Linde plc (NYSE:LIN) with a collective price tag of $4.6 billion. Ian Simm’s Impax Asset Management was the largest shareholder of the firm at the end of Q4 2021, with 2.98 million shares worth more than $1 billion.
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