If you’re looking for UK shares that could make you rich, I think it’s worth concentrating on the technology sector.
Technology has revolutionised the world. It doesn’t look as if its unstoppable rise is going to come to an end any time soon either.
With that in mind, today I’m going to take a look at two UK shares that may help investors profit from this theme.
UK shares to buy
The UK online gambling market is one of the largest and most developed in the world. Flutter Entertainment (LSE: FLTR) is one of the largest players in this sector, which gives it a unique competitive advantage. The company is highly cash generative and has been using this money to snap up smaller competitors.
The business is now also expanding into the United States. It has signed agreements with major companies across the pond to help them leverage their brand into the country’s rapidly growing online sports betting market.
Flutter earns a large percentage of its profit from sports betting, but its diversification into casino games helped it weather the coronavirus lockdown.
Thanks to this diversification, City analysts are forecasting a 75% increase in the company’s earnings for 2020. Further growth is expected in 2021 as the group builds its position in the US. Few other UK shares are set to report such explosive growth in 2020.
Shares in the gambling giant are currently changing hands at a forward price-to-earnings (P/E) multiple of 25. That might look expensive at first, but after taking into account the fact that the company’s net income has grown sixfold since 2014, and the growth opportunity ahead of the business, I think this price actually undervalues Flutter’s long-term potential.
Just Eat Takeaway
Just Eat Takeaway (LSE: JET) is another UK tech company that’s on course to report explosive growth this year. The coronavirus lockdown provided an almost perfect operating environment for the food delivery business. Management is now looking to capitalise on this and drive growth through further expansion in the years ahead. I reckon this makes the business stand out among UK shares.
Since its IPO, Just Eat has struggled to turn a profit. However, that is set to change in 2020. Analysts have pencilled in a net profit of €74m for the year. That should be followed by €179m of net profit in 2021, according to current projections.
Based on these forecasts, shares in the European technology giant are changing hands at a PEG ratio of 0.95. This suggests they offer a wide margin of safety. From now on, I think Just Eat will look to capitalise on its established position in the UK and European markets, to build out its international business. This may lead to accelerating profit and sales growth over the next five to 10 years.
Therefore, I reckon now could be an excellent time to buy into the business as part of a basket of high growth UK shares, while it offers a margin of safety.