While many companies listed on the stock market can take decades to double in price, some UK shares achieve it in less than a year. For example, last year, even in spite of the global pandemic, several high-profile UK shares doubled their valuations.
Amongst them were e-commerce star AO World and food manufacturer Premier Foods Group. Not to mention financial services company CMC Markets.With this in mind, I’ve scoured the UK stock market for companies I reckon could replicate this in 2021. Here are my three top picks.
Riding the green energy wave
Another company that more than doubled its share price last year was ITM Power (LSE: ITM). In fact, ITM’s valuation rocketed by an eye-watering 537% in 2020. While I can’t see the company mirroring that performance in 2021, I remain confident that ITM shares have plenty of room for further growth this year.
It designs and manufactures integrated hydrogen energy solutions for energy storage and clean fuel consumption. As such, the business plays a key part in the UK’s shift towards net zero carbon emissions. In fact, governments around the world are pouring billions into sustainable energy, which is good news for firms like ITM.
With contracts now in place outside of the UK, it already has an impressive global focus. While 2020 financial results were adversely affected by Covid-19, it has been expanding operations at a blistering rate.
Ultimately, thanks to the lucrative long-term potential of ITM shares, I wouldn’t be at all surprised if the company’s valuation doubles this year.
A UK share poised for a strong recovery?
Many stocks were battered in 2020, which is no surprise. A multitude of companies struggled under the pressure of the pandemic, causing many to come dangerously close to going under. Furthermore, widespread lockdown restrictions took their toll, adversely impacting firms that rely on customers visiting physical sites.
For example, Cineworld’s (LSE: CINE) cinemas closed around the world, prompting major upcoming films to delay their release. Consequently, the Cineworld share price tumbled and still remains around 70% down since the beginning of 2020.
Steps have been taken to secure much needed funding and to boost liquidity, yet the company remains in a perilous position. But I’m feeling bullish in relation to the recovery prospects of the film industry, and think Cineworld shares could prove a savvy (albeit contrarian) investment decision.
If the company’s valuation returned to its pre-pandemic level, the shares would have rocketed by around 243%.
A British stock with outstanding growth potential
My final pick is the UK-based fashion retailer ASOS (LSE: ASC). Having witnessed its share price increase by 40% in spite of the major sell-off in March, ASOS shares show no sign of letting up in my eyes.
Such a view is backed up by recent financial results, which outline a further surge in revenues. Full-year earnings will now be at the top end of market expectations thanks to impressive festive season trading figures.
Ultimately, ASOS’s strong earnings growth over the years is testament to its lucrative business model. Online fashion and retail are increasing in popularity as a result of the pandemic. So I think ASOS shares could perform well if I bought them in 2021, perhaps even doubling in price.