It’s been almost a year since the 2020 stock market crash kicked off. But Covid-19 continues to play havoc with investor nerves as new variants emerge and vaccine rollouts in Europe disappoint. An enormous number of UK shares continue to trade below their pre-crash levels as a consequence.
I personally consider this to be a prime buying opportunity. Indeed, I’ve been busy buying UK shares following the crash to get what I see as five-star stocks at little cost. Take Coca-Cola HBC (LSE: CCH), for example. Revenues here were hit in 2020 as Covid-19 lockdowns caused sales from bars and restaurants to sink, and demand for its bottles and cans from people who are out and about unsurprisingly slipped. The prospect of a longer-than-expected public health emergency could prolong these pressures for the FTSE 100 firm too.
But as a long-term investor I thought Coca-Cola’s share price fall was too good to miss. I bought the company at a 28% discount to what it was trading at just before the 2020 crash. I believe I can expect the share price to leap from these levels in the years ahead as broader consumer spending levels rise again. Coca-Cola’s strong record of product innovation and brand development also leads me to believe this UK share will recover strongly. Product launches in 2019 accounted for 4.2% of total volume growth that year.
2 more cheap UK shares on my ISA radar
As I say, there are still many UK shares that are trading below their pre-crash levels. Here are a couple more I’m thinking of buying for my Stocks and Shares ISA in 2021.
#1: QinetiQ Group
Defence giant QinetiQ Group is still trading much more cheaply than it was before last February. By my reckoning, it trades a full 20% cheaper than it was this time a year ago. It’s a descent that reflects investor fears that arms budgets could fall following the Covid-19 crisis. I’d still buy this UK share however as the long-term outlook for weapons spending remains robust.
I also like QinetiQ as it’s a key supplier to the Ministry of Defence. Just last month it inked a £127m, five-year contract to supply engineering services for the Royal Air Force’s fleet of Typhoons. All this explains why City analysts currently think annual profits here can keep rising over the next three fiscal years at least. But as we know, that’s never guaranteed and profits could also fall.
#2: Associated British Foods
FTSE 100 firm Associated British Foods has also endured a chunky share price fall during the last 12 months. It’s now trading 15% lower than it was on February 4 2020. I can understand why investors have felt compelled to sell. Its Primark shops face prolonged closures as the coronavirus tragedy rolls on and it has no online operations to soften the impact. Demand for its fashion might also suffer should broader consumer confidence remain weak.
I still think ABF offers terrific long-term appeal, however. In particular I remain encouraged by the UK share’s dedication to international expansion, a programme I think should supercharge profits during the next decade at least. Primark now has around 400 stores spread across more than a dozen countries and its budget prices could prove appealing in a downturn.