I’ve been looking for UK shares to buy for my portfolio. I’ve been looking for recovery stocks, equities that I think can capitalise on the UK economic recovery over the next few quarters and years.
Due to the nature of these investments, they might not be suitable for all investors. Investing in turnaround opportunities can be a risky pastime, as there’s never any guarantee the business will turn around.
Still, I’m comfortable with the level of risk involved. As such, here are three UK shares I’d buy with £3,000 today.
Should you invest £1,000 in BAE Systems right now?
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UK shares to buy
The first investment is the aviation infrastructure business John Menzies (LSE: MNZS). The pandemic floored the aviation industry, and it’s only just starting to recover.
Menzies is no exception. In the first half of 2020, the group’s operating loss totalled £70m. Luckily, the business has turned a corner. Profits rebounded in the first half of 2021. The group reported an operating profit for the period of £15m.
Going forward, the company should benefit from new business wins, as well as the cost efficiencies it’s achieved over the past 12 months. As its turnaround gains traction, I think it’s one of the best shares to buy.
Those are the reasons why I’d add the stock to my portfolio of UK shares. However, it’ll face some challenges as we advance. These include competition, rising prices and the potential for further disruption from the pandemic.
Moving on from past mistakes
Shares in oil and gas engineering group Petrofac (LSE: PFC) have been under pressure recently. Investors have been selling the stock as the organisation’s faced accusations of bribery and an investigation from the Serious Fraud Office (SFO).
It looks as if the firm’s now starting to move on from these issues. Petrofac’s planning to plead guilty to several accusations made by the SFO. This should remove some uncertainty surrounding the group.
At the same time, I think the enterprise will benefit from rising oil prices. These may encourage more investment, which will increase the demand for services from engineers such as Petrofac. At the beginning of this month, the group won a $100m contract to work on Libya’s oil fields.
While I’d buy this company for my portfolio of UK shares, I’ll be keeping an eye on oil prices. A sudden slump could impact the demand for Petrofac’s engineering services. This would hold back its recovery.
The office returns
The final company on my list of UK shares to buy is the workspace group IWG (LSE: IWG). The owner of the Regus shared office space provider, IWG may benefit from an increase in flexible working demands.
Some of its competitors are already reporting an uptick in demand for flexible workspaces, as working patterns change after the pandemic.
As one of the largest providers in the sector, Regus could benefit disproportionately from this trend.
That said, if there are further lockdowns, demand for the company’s services may drop. It could also suffer from increased competition and higher interest rates, which would increase the interest bill on its debt obligations.
Despite these risks and challenges, I’d buy the company for my portfolio of UK shares today.
