Should I buy these UK shares?

With the end of the pandemic in sight, many UK shares are finally on the road to recovery. For example, the FTSE 100’s current price of roughly 6,600p is down just 11% compared to the 7,433p of exactly one year ago, and up nearly 35% on its lowest pandemic price.

These developments are promising, and have put a couple of interesting UK shares back on my radar.

Whitbread

Best known for owning and operating hospitality brands like Premier Inn and Brewers Fayre, Whitbread’s (LSE:WTB) business hasn’t exactly been booming recently. In fact, its share price dipped by 55% between 19 February and 19 March 2020 to hit a harsh low of 1,808p.

That said, solid vaccination progress since late October has led its share price back to roughly 3,330p. This is despite UK accommodation sales being down 55% in the weeks leading up to December 2020. There’s a good chance of a continued rise throughout 2021 as its businesses reopen.

I’m not just thinking about Whitbread’s recovery, though. It’s also one of my favourite long-term UK shares, and Tim Charles agrees with me.

Despite its brands being closed, the company finished 2020 with £40m net cash. This speaks volumes of its ability to generate cash. This should be even more defined in a ‘normal’ world. Furthermore, its Q3 trading update confidently states that the group is “well-positioned to continue its outperformance versus the market”.

Premier Inn in particular continues to outperform its rivals. With plans in place to build even more hotels around the country, its share of the market continues to rise, while foreign travel restrictions mean UK holidaymakers have a good chance of booking themselves into a Whitbread-owned establishment this summer.

I’ll be keeping in mind the current volatility of hospitality before I make any decisions, though. We’re expecting this lockdown to be the final one, so another unexpected closure of hospitality venues could pose financial risks Whitbread is unprepared for. 

National Express

I’ve actually owned shares in National Express (LSE:NXE) since earlier this year. My decision to invest mostly came from what I learned while researching for a previous article. The question is, should I now buy more?

Its recovery was strong, with its 90p share price low eventually rising by 163% to 237p at the start of 2021. This is roughly when I invested, and in the six weeks since then we’ve seen another 25% rise. Continuing at this rate would double my money by late June (though I’m aware that’s overly ambitious).

But I’m still happy with its long-term potential. As UK shares go, National Express is in a good position. In line with government initiatives to reduce emissions, the company has already committed to a zero-emission fleet in the next 10 years. Thanks to its size, it also has the financial ability to adapt quickly to the ever-changing landscape of the travel industry.  

Personally, I’ll probably wait until National Express releases its full-year results on 10 March before deciding to invest more. That way, I can assess the risks posed by competitors and the company’s current debt. As of right now, its debt is approaching £1.5bn. 

At the very least, I’ll be keeping a close eye on both of these UK shares. It wouldn’t surprise me if National Express coaches were driving a lot of customers to Whitbread-owned hotels this summer…