Buying UK shares based on how their prices could perform in the short term is highly risky. Disappointing news on a company could cause its shares to plummet in value. Broader macroeconomic news might hit its share price too, even if trading in the stock remains robust.
That said, there’s nothing wrong with me buying a quality stock I think might rise in value in the short term, provided I’d be happy to hold it for several years at least. Over this sort of timescale there’s a good chance the company could still make me terrific returns, even if its share price sinks in the near term.
With this in mind, here are two top UK shares I’m thinking of buying in October.
The magic touch
Profits at Bloomsbury Publishing (LSE: BMY) soared during 2020 as Covid-19 lockdowns prompted a surge in reading. It’d be a mistake to think this surge was a flash in the pan though. The publisher upgraded its full-year guidance back in June, thanks to continued strong trading. And it subsequently announced at its AGM that sales rocketed 28% in the four months to June.
I think the UK share could release another set of impressive financials when half-year results come out on 27 October. In fact, I’d buy Bloomsbury shares with a view to holding them for a long, long time. Its Consumer division, led by the evergreen Harry Potter franchise, continues to go from strength to strength. And the company’s recent foray into the field of academic publishing is already paying off handsomely too.
I’m also encouraged by Bloomsbury’s hunger for acquisitions, a strategy that recently saw it snap up Head of Zeus and Red Globe Press.
However, an M&A-led growth strategy leaves a company in danger of overpaying for an asset, perhaps even acquiring what ultimately proves to be a dud.
But I’m encouraged by Bloomsbury’s track record on this front, though past performance is, of course, no guarantee of future success.
A top UK tech share to buy
I think Netcall (LSE: NET) could be another great UK share to buy in October. The tech business has already rocketed 120% in value over the past 12 months. I think more gains could be recorded once full-year results are unpacked on 6 October.
Netcall provides software that helps companies automate their processes and engage their customers more effectively. It’s therefore in great shape to exploit the increased amount of spending by businesses on digitalising their operations. Demand for Netcall’s cloud-based product is particularly strong and recurring revenue here shot 16% higher in the 12 months to June.
Netcall hiked its full-year expectations when it released its interims in February. I think the firm’s continued strong momentum could prompt further upgrades in the weeks and months ahead too. The company drew attention to its “strong pipeline and… substantial market opportunity” last time out.
I’d buy this share, even though a stuttering economic recovery could damage earnings in the near term.