Among the top 10 UK shares sold by Hargreaves Lansdown investors in the past week are BP, easyJet and Barclays.
Clearly, all three companies are experiencing very challenging operating conditions that have been reflected in disappointing share price performances during the course of 2020.
However, does this mean now’s the right time to sell them? Or, could they post sound recoveries in a likely stock market rally over the long run?
Potential outperformance of other UK shares
easyJet’s challenging outlook may have prompted Hargreaves Lansdown investors to prefer other UK shares at the present time. That’s not a major surprise, since the budget airline is expected to face significant disruption for many months, or even years.
However, the company has strengthened its financial position through a capital raising in 2020, as well as an efficiency programme that’s reduced all unnecessary expenditure. This should allow it to overcome a challenging period, placing it in a strong position to deliver a recovery in a likely stock market rally.
As such, it could offer investment potential relative to other UK shares for investors who have a long time horizon. Its market position, the likelihood of a return to some form of travel normality in 2021 and an improving economic outlook may mean it delivers an improving share price performance.
A low valuation relative to other FTSE 100 stocks
Barclays was the 10th most sold company by Hargreaves Lansdown investors in the past week. However, it could offer good value for money relative to other UK shares after its share price decline of around 20% since the start of the year.
The bank now has a forward price-to-earnings (P/E) ratio of 18. However, it’s forecast to post a 75% rise in earnings next year. This suggests it may offer a wide margin of safety. An improving economic outlook may also have the potential to lift its profitability in the coming years.
An unpopular stock among Hargreaves Lansdown investors
BP could also be among those UK shares that benefit to the greatest extent from an expected stock market recovery. Improving investor sentiment and increasing global GDP growth may lift demand for oil and gas.
This could translate into higher profitability and a greater amount of capital. That would certainly help it complete its transformation into a business that focuses on low-carbon assets.
Of course, Hargreaves Lansdown investors may be cautious about the oil and gas sector. Certainly as the world seeks to embark on a green recovery from coronavirus.
However, the BP share price fall of 42% since the start of the year suggests that this threat may already be priced in. As such, it may offer the prospect of an outperformance relative to other FTSE 100 shares in a likely long-term stock market recovery.