This year has provided no shortage of movement on the stock market. Many well-informed investors have picked UK shares that have doubled, tripled, or even quadrupled in value.
I expect a lot of action on the stock markets in 2021 too. That means now is a good time to start thinking about one’s investment strategy for next year. I am eyeing a few shares that already doubled in value at some point this year – but which I think could double again in 2021! That may sound too good to be true, but in each case I think a solid business strategy underpins the investment thesis.
This big bank is on a tear
Shares in banking group Barclays (BARC) fell as low as 73p this year. If I had bought them at that price, I would have had the opportunity to sell them this week and double my money. They now sit just below 150p. That is an excellent return.
But I would buy these UK shares even now. I think Barclays could double my money again in 2021. The well-respected banking brand has a solid UK business, and its investment banking arm gives it a potential revenue stream unique among UK banks its size. That helps explain why Barclays has been profitable every quarter this year, even in the pandemic.
Banks have not paid dividends since the pandemic, so profits are piling up at Barclays, which should be good for a strong future payout. Barclays has made pre-tax profit of £2.4bn so far this year. With such strong performance, I think its shares could double again in 2021.
Two turnaround stories in UK shares
A fall in demand has pummelled transport shares this year. Combined rail and bus operator Go-Ahead Group fell below 400p at one point. They now trade above 900p so have more than doubled.
But I think there is still time to get in on the recovery story. These UK shares are less than half their price in January even after the recent increase. But the company has an attractive set of franchises. Go-Ahead has been a large dividend payer before. It generates 90% of its revenues from sources that aren’t affected by falls in passenger demand, such as fixed price contracts.
Last week, the company said it was working towards paying a dividend again in 2021. I expect that to be positive for the shares, even if the dividend is lower than it used to be. I am considering buying Go-Ahead shares.
A third share I think could double again in 2021 is SIG. This building materials supplier had management and pricing issues even before the pandemic hit, so it tumbled from 120p in January as low as 15p. It is double that now, but has not shared in the recent market rally. With significant structural challenges in the marketplace and a dilutive rights issue in the summer, I think shareholders are waiting for solid evidence of recovery.
There is clear evidence of renewed demand for building materials from other UK shares. I expect that will also benefit SIG. The company faces a tough climb back to former glory, but with its new management, I think the shares could double again in 2021.