Investor demand for UK shares remains pretty flat as we enter the back end of July. Sure, the FTSE 100 and FTSE 250 have chalked up low-single-digit percentage gains since the start of the month. But fears over what rising Covid-19 infection rates might mean for the global economy is keeping a firm lid on investor appetite.
These fears aren’t discouraging me from continuing to invest though. Indeed, here are two of what I think are the best UK shares to buy now. I believe they could soar in value later in July.
Get book smart
Bloomsbury Publishing (LSE: BMY) has traded very robustly during the Covid-19 crisis. Publishers had problems at the beginning of the pandemic as bookshops were shuttered en masse. But trade recovered strongly as lockdowns prompted a surge in reading and book sales via the internet rocketed.
Sales at Bloomsbury soared 14% year-on-year to record highs in the 12 months to February. This wasn’t just thanks to people staying at home in the period either. Indeed, due to popular titles, like its evergreen Harry Potter franchise, revenues at the UK media share far outperformed that of the broader book sector (sales across the industry rose 2% in 2020, according to the Publishers’ Association).
Trading at Bloomsbury was so strong in fact, that the business upgraded its profit forecasts three times in fiscal 2021. The small-cap has plenty of momentum and this bodes well with a fresh trading update due on Wednesday, 21 July. Bloomsbury’s risen around 75% in value over the past year and I think fresh gains could be in the offing.
It’s true that sales at Bloomsbury could take a hit as Covid-19 restrictions are unwound and people spend less time reading. But as a long-term investor, I think there’s plenty to be encouraged by here. In addition to its stacked stable of book titles, I think the company’s recent entry into academic publishing could also helped deliver good shareholder returns.
Another top UK media share to buy
I’m also anticipating a set of impressive financials from Reach (LSE: RCH) on Tuesday, 27 July. An explosion in page clicks at its news websites has helped the UK share soar 325% in value over the past year.
Latest financials in May showed digital revenues rise 35% year-on-year in the first four months of 2021 as the number of registered users rose by 400,000 to 6.2m.
Reach has also been enjoying a better-than-forecast decline in print revenues in recent times. And so at group level, revenues between January and April came in slightly ahead of expectations. This is an encouraging sign, ahead of those upcoming interims this month.
Today, Reach trades on a rock-bottom forward price-to-earnings (P/E) ratio of 8 times. This gives plenty of scope for more impressive share price gains, in my opinion. I think it’s a top UK share to buy, even though it’ll have to continue pulling hard to compensate for tanking print sales. These dropped 10.4% between January and April.