There are not many of these opportunities on the London market. It takes a lot of time to uncover these world-beating companies, but I believe I have been able to isolate two potential opportunities. 

With that in mind, here are the two UK shares I would buy for growth today. 

UK shares for growth

The first company on my list is information technology (IT) infrastructure solutions provider Softcat (LSE: SCT). This business has grown at breakneck speed over the past few years. Since 2016 its earnings per share have grown at a compound annual rate of 24%.

As the world becomes more digitised, I expect the demand for this company’s services will continue to increase. As long as management continues to invest in the organisation’s capabilities and expand its footprint, I think the business can rise to the challenge.

That said, this is quite a competitive market. Softcat will need to keep investing and putting its customers first if the enterprise is going to remain a leader in this market. 

Even after taking this challenge into account, I believe it is one of the best UK shares to buy for growth. Considering its position in the market and potential for expansion over the next five to 10 years, I think the stock is undervalued. 

Building growth

I would also acquire Travis Perkins (LSE: TPK) for my portfolio. This distributor of building materials and products across the UK is not the only company in the sector, but it does have one of the most extensive footprints. This footprint gives the corporation substantial economies of scale. That means it can provide services and products to customers at a lower cost than many of its competitors. 

The business is currently having to deal with several challenges. These include the supply chain crisis and rising materials costs. These headwinds could have an impact on the company’s growth in the next few years as it works through the issues. 

Nevertheless, I believe Travis has the qualities required to pull through this uncertainty. It could even emerge stronger on the other side if its competitors start to struggle.

City analysts are forecasting a 40% expansion in the enterprise’s profits this year as it capitalises on the UK’s booming construction market.

Based on these projections, the shares are selling a forward price-to-earnings (P/E) multiple of 12.7. I think that looks cheap compared to the company’s growth potential. This is why it sits at the top of my list of the best UK shares to buy for growth today.

Meanwhile, luxury goods retailer Mulberry Group (LSE: MUL) saw its stock climb 20%. Shares in the fashion firm have risen by more than 50% over the last year.

What’s happened — and why are shareholders seeing these big moves today?

Travis Perkins share price falls on Wickes split

Shares in FTSE 250 builders’ merchant Travis Perkins are falling today, but this isn’t due to any bad news from the company. What’s happened is that the Wickes business, owned by Travis Perkins, has now been spun out into a new company.

Travis Perkins’ shareholders will shortly have shares in Wickes credited to their share accounts. Wickes shares will trade on the London market under the symbol WIX.

Today’s share price fall reflects the loss of the value of the Wickes business. But Travis Perkins shares could rise again in the next few days, as the firm plans to carry out a share consolidation.

This means Travis Perkins’ existing shares will be replaced with a reduced number of new shares. The number will be calculated to try and “maintain broad comparability” in Travis Perkins’ share price before and after the demerger.

All of this will happen automatically — existing shareholders will see the TPK shares in their accounts replaced with new shares. The overall effect should be that the combined Travis Perkins and Wickes shares will be roughly equal to the value of Travis Perkins shares before the split.

Of course, the two companies will trade independently now, and their values may move in different directions, over time. Shareholders who don’t want to own shares in both businesses can choose to sell either Travis Perkins or Wickes.

Why split?

The reason given for the split is Travis Perkins is focused on larger trade customers, whereas Wickes is focused on DIY, home improvement and local trades — the “do it for me” market. Travis Perkins’ management believes both companies will be able to perform better independently.

Even before today’s split, both companies were said to be trading well. On 15 April, Travis Perkins issued a first-quarter trading update reporting “an encouraging start to the year.” Management said first-quarter sales at Travis Perkins and Wickes were significantly ahead of the same period last year.

Mulberry share price rockets 20%

Luxury handbag group Mulberry has been through a tough time in recent years. Mulberry’s pre-tax profit has fallen from a high of £36m in 2012 to a loss of £48m in 2020. This slump wasn’t just due to the pandemic — the group reported a £5m loss in 2019.

Finally, shareholders have had some good news. The company says that sales during the year to 31 March have been better than expected. This is due to stronger online sales and reduced discounting.

Mulberry had been expected to report a loss for the year just ended, but the company now expects to report “a small underlying profit before tax” for 2020/21.

Mulberry’s share price remains more than 85% below the highs of over 2,100p seen in 2012. But the company’s performance does seem to be improving. More details are expected in July, when Mulberry will publish its 2020/21 results.

UK shares I’d buy 

The UK construction sector is booming. And to play this theme, I’d buy Travis Perkins (LSE: TPK). One of the biggest suppliers to the building market, the company should benefit from the rising demand for materials. 

Analysts expect earnings to increase rapidly over the next two years, reaching 108p per share in 2022, up from 93p in 2019. I think the company should be able to use this growth to reinvest in new facilities and products, which would ultimately increase its appeal to customers in the long run.

The biggest challenge the group faces is the cyclical nature of the construction industry. The sector is expanding right now, but it could take a sudden turn for the worse. That would be bad news for Travis. 

Still, considering its near-term potential, I’d buy the stock as part of a basket of UK shares today. 

Income and growth 

As one of the only publicly-traded hedge funds, I think Man (LSE: EMG) could be a great addition to a portfolio of UK shares. 

The purpose of hedge funds is to make money in all markets. Man has a solid track record of doing so and producing attractive returns for its public investors along the way. Indeed, analysts believe the stock’s dividend yield will hit 4.8% in 2021, although this is just a forecast at this stage. 

What’s more, based on current forecasts, the stock is currently dealing at a forward P/E of 12. That looks cheap to the market average of 16, in my view. 

However, I do think the business deserves a slight discount to the broader market. Hedge fund profits can be highly volatile. So, while Man has a good track record of generating profits for investors, there’s no guarantee this will continue. It also uses a lot of borrowing. As such, just one bad year could result in considerable losses. 

Due to the risks outlined above, this stock may not be suitable for all investors. But I’d buy Man for my portfolio of UK shares today. 

Asset management

Asset managers tend to do well in rising stock markets. With that in mind, as UK shares reach new all-time highs, I think the outlook for Rathbone Brothers (LSE: RAT) is bright.

The company is one of the UK’s most storied asset and wealth managers. Its reputation should continue to attract customers. Moreover, management has been complementing organic growth with acquisitions. I think these twin tailwinds should help the business go from strength to strength. 

The primary risk facing the business is the same as I’ve outlined for Man. A lousy year of trading could hurt management fee income. Also, if the group suffers reputational damage, customers could quickly move elsewhere. 

Even after taking these risks into account, I’d buy the stock for my portfolio of UK shares. 

Kevin Godbold: Smurfit Kappa

The FTSE 100‘s Smurfit Kappa (LSE: SKG) provides paper-based packaging solutions and occupies a niche supplying the needs of e-commerce. In February, chief executive Tony Smurfit said the outlook is “increasingly positive”.

The business delivered a strong cash performance in 2020, as befits its defensive credentials. There’s a multi-year record of growth in cash flow and dividends. And last year the company raised a gross €660m via a share placing to “capitalise on structural drivers of growth”. I think the market may warm to the firm’s enhanced growth prospects, perhaps as soon as during March.

Kevin Godbold does not own shares in Smurfit Kappa.

Kirsteen Mackay: Travis Perkins

I think FTSE 250 company Travis Perkins (LSE: TPK) looks a top British stock for March. Construction is still under way in the UK and, as the country begins to reopen, activity should increase. As well as Travis Perkins Builders’ Merchants, the company operates Toolstation, Wickes, Keyline, BSS, City Plumbing and several more. 

Travis Perkins has a forward price-to-earnings ratio of 22, earnings per share are 49p, and it has a market cap of £3.7bn. It recently conducted a survey that showed tradespeople across the country are optimistic their workload will increase or remain the same throughout 2021. Its next earnings call is in March.  

Kirsteen Mackay does not own shares in Travis Perkins.

Christopher Ruane: Photo-Me International 

Photo-Me International (LSE: PHTM) continues to be in the doldrums. I think the increasing optimism about moving beyond lockdowns will benefit the vending machine company. The company has been reshaping its portfolio to reflect changed realities; the launderette business has good growth potential, for instance. Additionally, over the past year the CEO has bought over 19 million shares in the company.

The business outlook remains unstable and Photo-Me shares have been disappointing over the past few months. But they are more attractive to me now as I expect them to benefit from improved business prospects beyond the pandemic.

Christopher Ruane does not own shares in Photo-Me International.

Rupert Hargreaves: Royal Mail

Royal Mail’s (LSE: RMG) recovery over the past few months has caught many investors, including myself, by surprise. After a change in leadership last year, the firm has capitalised on the booming e-commerce market over the past 12 months. Parcel deliveries have exploded, and the company has had to take on more staff to meet demand.

If Royal Mail can capitalise on this expansion in 2021, I think its growth is only just getting started. Additional investment in its operations and development in the group’s international business may underpin strength in the stock for years to come. The firm is also likely to re-introduce its dividend as profits recover.

Rupert Hargreaves does not own shares in Royal Mail.

Paul Summers: Avon Rubber

Having now tumbled 35% from its share price peak in December 2020 following a contract delay, I think military equipment supplier Avon Rubber (LSE: AVON) warrants consideration. This is especially after January’s trading update stated that the company is confident of hitting targets for the current financial year due to “good order intake” across its portfolio.

Avon’s great growth credentials mean its stock is unlikely to ever be cheap in the traditional sense. However, it does possess many of the things I consider worth paying up for, including a bulletproof balance sheet and (pre-coronavirus) consistently good returns on capital. A ‘buy and forget’ strategy could prove lucrative for this top British stock beyond March.

Paul Summers has no position in Avon Rubber.

Jonathan Smith: Barclays

Barclays (LSE:BARC) recently released the full-year 2020 results. Although profit was down 30%, this was mostly driven by underperformance in the retail bank. The investment banking arm had an exceptionally strong year, with profits up 35%. Given the diversified nature of the bank, this helps to show resilience even during the pandemic.

Given the expected bounce-back in the UK economy later this year, the retail bank should improve performance for 2021. When I add into the mix the resumption of a small dividend and share buybacks, I think now could be a good time to buy in.

Jonathan Smith has no position in Barclays.

Matthew Dumigan: Keywords Studios

The gaming industry has been one of the few to benefit in spite of widespread lockdown restrictions. Furthermore, with the global gaming market looking set to continue expanding over the coming years, companies such as Keywords Studios (LSE: KWS) are ideally positioned to profit. 

According to analysts, the recent release of the next generation games consoles is set to boost demand over the coming years. As such, with Keywords Studios providing essential services to developers in the industry, I think they look set to continue their momentum moving forward.

Matthew Dumigan does not own shares in Keywords Studios.

Conor Coyle: Diageo

FTSE 100 drinks producer Diageo (LSE:DGE) has seen its share price suffer as a result of Covid-19. While ongoing restrictions on the hospitality sector have had a major impact on sales of beer, Diageo’s spirit sales have gone up in key markets due to good off-trade performance.

My feeling is that pubs and restaurants will start to creep open in the months ahead as the vaccine rollout gathers pace, and ultimately return the Guinness owner to its pre-Covid price of around 3200p and beyond, making it my top British stock for March

Conor Coyle owns shares in Diageo.

Zaven Boyrazian: Ocado

Ocado (LSE:OCDO) is often thought of as an online grocery retailer. But last year, the business pivoted.

The company is now using robots to automate the production, packaging and delivery of groceries to 10 other retailers, including Morrisons, Kroger, and Marks & Spencer.

What’s more, there appears to be a network effect. With each new platform customer, more funds become available to reinvest and improve the system, attracting even more customers.

The sudden shift in the business model means it could be a while before it returns to profitability.

However, Ocado looks like a brand new, up-and-coming business that I’d buy and hold in my portfolio despite these risks.

Zaven Boyrazian does not own shares in any company mentioned.

Royston Wild: Reach 

Newspaper publisher Reach (LSE: RCH) is set to update the market at the top of the month (full-year numbers are slated for Monday, March 1). I  think this makes now a great time to buy shares in the company. 

Reach certainly impressed the market with its freshest financials released in early January. Its share price sprang to seven-year peaks after it announced that digital sales continued to accelerate sharply at the end of 2020. I expect next month’s update to confirm that online revenues have kept on marching skywards. 

Reach’s share price has kept growing in recent weeks. Yet the publisher still trades on a forward price-to-earnings ratio of 8 times. This makes it a very attractive UK value share in my book. 

Royston Wild does not own shares in Reach.

Edward Sheldon: Hargreaves Lansdown

My top British stock for March is Hargreaves Lansdown (LSE: HL). It operates the largest retail investment platform in the UK.

Hargreaves Lansdown is benefiting from the increased interest in investing and trading. Its most recent half-year results for the six months to 31 December 2020, for example, showed that it added 84,000 new customers over the period. This was almost 70% higher than the number of customers it added in H1 2019. Revenue for the period was up 16% to £299.5m while diluted earnings per share were up 10% to 32p.

HL isn’t the cheapest stock around. At the time of writing, the forward-looking price-to-earnings ratio is about 26. This means there’s valuation risk. Overall, however, I think the risk/reward proposition is attractive.  

Edward Sheldon owns shares in Hargreaves Lansdown.

Andy Ross: HSBC 

Shares in the Asia-focused bank HSBC (LSE: HSBA) have some momentum, despite concerns about its relationship with the Chinese government and profit falls.   

I believe that the reintroduction of dividends, improved strategy, further cost cutting and Chinese economic growth, can all help revitalise the company and the share price. There’s a lot that can be improved at the bank and therefore a lot of chances for management to be proactive and put in places positive measures to boost the share price. I think the shares are cheap and so offer an attractive level of reward versus risk.  

Andy Ross does not own shares in HSBC.

Roland Head: Persimmon

Demand for new housing stayed strong last year, according to FTSE 100 housebuilder Persimmon (LSE: PSN). The group’s average selling price rose by 6% and Persimmon ended the year with and increased order book.

One possible risk is that the lucrative Help to Buy scheme is due to be restricted to first-time buyers from April. Another concern I have is that the outlook for the UK economy remains uncertain.

However, Persimmon has more than £1bn of surplus cash and strong profit margins. The shares have a historic dividend yield of 4%, but analysts expect a big increase in 2021. I’d consider buying the stock at current levels.

Roland Head does not own any share mentioned.

Tom Rodgers: Barclays

Rising inflation and a steepening yield curve should favour bank profit margins going into March 2021, making my top British stock for this month FTSE 100 turnaround company Barclays (LSE:BARC).

In recently released FY2020 results the bank beat profit forecasts, reinstated its dividend and instigated a £700m share buyback, putting some meat on the bones of a more positive outlook. The shares are trading on an undemanding forward price-to-earnings ratio of 9, and with value investing metrics like price to book and price to free cashflow below 1, Barclays now looks like very tempting buy to me.    

Tom Rodgers has no current position in Barclays.

Manika Premsingh: Just Eat Takeaway

Just Eat Takeway (LSE: JET), the FTSE 100 food delivery provider, will release its 2020 results in March. In my mind there’s little doubt that it would’ve seen robust sales growth during the year, going by the trends so far.

But what I’m really interested in is its outlook for 2021. JET got a lockdown boost as consumers ordered in more than before. Its share price, too, remained strong. The question now is – can it maintain high growth post-lockdown?

I think it would be reasonable to expect some moderation in sales growth this year. But I don’t think it takes away from its robust long-term prospects. In fact, a share price dip on the results may be a good opportunity to buy it then.

Manika Premsingh owns shares of Just Eat Takeaway.

FTSE 100 income investment

FTSE 100 stock Standard Life Aberdeen (LSE:SLA) has taken a battering in recent months. The investment management company has seen its share price fall 10% in the past week after announcing the disposal of 40m shares in HDFC Life, its Indian joint venture partner. Investors had welcomed the sale as it was to bring liquidity to the troubled company, but it went through at a price of £30m below expectations. Thankfully, Standard Life’s one redeeming feature is its 8.5% dividend yield, which has so far survived the pandemic. Standard Life shares are trading with a price-to-earnings ratio of 28, which is very high considering the economic situation. This leads me to expect further volatility ahead. However, I think it is a stock that will endure and with such a generous dividend, it could be hard to pass up for a long-term income investor’s portfolio.

High-risk stocks

FTSE 250 constituent and commercial property company Hammerson has seen its share price rise a staggering 157% in the past month. The company owns various shopping centres and as the UK retail sector begins to reopen, hopes are being pinned on a recovery. But Hammerson shares are still down 60% in a year and it is likely to have many struggles ahead. I would avoid this stock.

FTSE All-Share member Premier Oil is a highly volatile oil stock loved by day-traders. It is saddled with a lot of debt, but until coronavirus hit, it was winning contracts and on the way to financial freedom. It still has the potential to make a comeback, but a suppressed oil price will make this difficult. The PMO share price is up almost 6% this morning, up 55% in a month, but down 40% in a year. I think it is a risky buy, but one to watch.

Pandemic fallout

Builders merchant Travis Perkins (LSE:TPK) made the depressing announcement yesterday that it will be closing 165 stores and dropping 9% of its workforce, with nearly 2,500 job losses. Yet another retailer hard hit by the pandemic, the Travis Perkins share price fell on the news, but has rebounded nearly 6% this morning. Although it expects the coming recession to last a couple of years, it does see a glimmer of hope that the construction industry is resuming. The FTSE 250 constituent also owns Toolstation and Wickes. The company told the London Stock Exchange that most store closures will affect the Travis Perkins General Merchant operation, where profit margins are slim and safe distancing practices are difficult to implement. 

From a personal viewpoint, my neighbourhood Travis Perkins has been operating a limited service in recent weeks, while other builders merchants in the area have been doing a roaring trade. I get the impression many of those customers will not remain loyal to TP. Product price and availability are ultimately what keep these businesses going. Travis Perkins will need to be competitive on either or both to survive and thrive. It is not a share I will be buying. 

I last looked at building supplier Travis Perkins (LSE: TPK) in October. I concluded that, in the event of a post-Brexit recession, I could see the whole construction materials sector suffering. And I decided to wait and see.

At the time, there was still a chance Boris could dump us out before Christmas with no deal, but things have improved. I still expect we’ll have a tough economic spell, but I see the future for construction as brighter now.

Trading

Since I wrote, the Travis Perkins share price has picked up too. The company owns the Wickes brand, among others, and a Q4 Wickes update Wednesday looked impressive.

Total sales in the quarter rose by 3.4%, with like-for-like sales up 4.5%. For the 2019 year in total, sales jumped 7.7%, with like-for-likes up 8.7%.

What that means for the future remains to be seen, with Wickes set to be demerged. That should happen in the second quarter of 2020, and it might seem bad to lose such a quality business. But demerging a retail division and focusing on its trade businesses seems like a sensible long-term approach.

Travis Perkins saw sales growth of 3.8% in the third quarter, with 3.6% year-to-date growth (and 4.7% like-for-like). I think that sets it up for a solid full-year, with results due on 3 March.

We’re looking at P/E valuations of around 14, with dividend yields at 3% or so. That’s not a screaming bargain, but I see fair value for a company with a solid long-term future.

Immune

My second pick is Sanne Group (LSE: SNN) which, I think, is essentially immune to Brexit. In July last year, my colleague Andy Ross rather prophetically saw Sanne as a better growth prospect than Sirius Minerals. Even putting that comparison aside, I think he got it right about Sanne.

The company bills itself as “a leading global provider of alternative assets and corporate business services.” And it’s a business that’s been generating impressive earnings growth in the past five years.

The year just ended December is expected to have seen a pause in that growth. But it looks set to resume quickly, with analysts predicting 14% rises in both 2020 and 2021.

Momentum

The 2019 year might even come in better than expected, as a Wednesday update tells us to expect a 16% rise in revenue. New business wins are around £24.5m, bang on 2018’s figure, and there’s “good momentum continuing into 2020 with some significant wins falling into the New Year.“

Cash conversion is strong, expected to exceed 100%, and that’s good news for dividends. Yields are modest at around 2.3%, but they’re strongly progressive. According to forecasts, Sanne will have nearly doubled its dividends in just four years since 2015.

P/E multiples are in the low twenties, but dropping quite quickly. I rate Sanne a long-term growth buy.

The biggest share price fall Monday morning came from SIG (LSE: SHI), whose shares plunged 26% in early trading as markets reacted to a profit warning. At the time I’m writing, the stock had recovered some of that initial slump and is trading 15% down on Friday’s close. But what’s wrong?

Outlook

SIG, which bills itself as “a leading supplier of specialist building materials to trade customers across Europe,” expanded on the ongoing deterioration it’s been experiencing in construction activity levels in its key markets. It told us it’s “now anticipating, in both the specialist distribution and roofing merchanting businesses, significantly lower underlying profitability for the full year than its previous expectations.”

In response, SIG has announced its intention to sell off two divisions in order to bolster its balance sheet. The firm has agreed the sale of its Air Handling division to France Air Management for €222.7m, with its Building Solutions division going to Kingspan Group for £37.5m.

Debt

I have to say I’m impressed when I hear of a company taking quick action in tough times like this. But SIG has also been struggling with high debt levels for a while, and that’s enough to make me additionally wary. At the halfway stage, net debt stood at £158.2m, which is more than twice annualised underlying operating profit (based on the first half).

That debt situation should be addressed well by the two disposals, but that leaves us with a company whose shape I can’t get my head round. I’d have to wait until I see a recovery actually happening and some figures on which I can base a valuation.

Contagion

The malaise afflicting the construction industry seems to be spreading too, with Travis Perkins (LSE: TPK) dipping 8% in early trading, and Howden Joinery down 5%. 

Like SIG’s shares, Travis Perkins’ have pulled back up again and, as I write, are trading just 3% down on the day so far. But, as one of the UKs leading building materials suppliers, any further slowdown in the construction business could be a cause for caution here too.

Travis Perkins shares have been erratic in 2019 so far, but they’re up 20% over the past 12 months and offer a forecast dividend yield of around 4%. That’s not the biggest yield on the market, but the payment would be more than twice covered by predicted earnings, even with EPS expected to fall 9% this year.

More debt

Travis Perkins reported a decent first half, with adjusted operating profit up 15% and adjusted EPS up 20%. But it’s another company that carries high debt, reaching £414m at the interim stage, and debt-intensive companies can be more likely to suffer than most during tough economic times.

Should we face a post-Brexit recession, I can see the whole construction materials sector suffering. I’d sit back and watch.

Clearly, there could be uncertainty ahead for the index. It is more dependent on the UK economy than the international growth outlook, which could mean that Brexit continues to weigh on investor sentiment.

In the long run, though, a number of mid-cap stocks could have impressive income outlooks. Here are two prime examples that also appear to offer wide margins of safety.

Travis Perkins

The first quarter update released by Travis Perkins (LSE: TPK) showed strong performance in difficult operating conditions. The company’s like-for-like sales growth was 7.3%, while its total sales increased by 5.4%. Its focus on customer service, coupled with a weak comparator from the previous year, boosted its financial performance.

The company’s online consumer brand, Toolstation, performed well. Its sales growth of 25% was the standout performer of the business, while its Merchanting sales growth of 10.6% was also impressive. Wickes has also experienced relatively high demand, with its core DIY and showroom categories boosting its overall sales growth to 10.5%.

Travis Perkins currently trades on a price-to-earnings (P/E) ratio of 13.5. Its bottom line is expected to grow by 5% this year, which would be a strong performance given the challenging operating conditions that it faces. With a dividend yield of 3.2% from a payout that is covered 2.3 times by profit, an improving income outlook could be ahead. As such, now could be the right time to buy a slice of the company.

Bellway

Also facing an uncertain operating outlook is FTSE 250 housebuilder Bellway (LSE: BWY). The housebuilding sector has been volatile in the last couple of years, with underlying growth being strong but investor sentiment being highly changeable.

Bellway is expected to post earnings growth of 5% in the current year. This would be an impressive result at a time when house prices in a number of regions are under pressure, and consumer confidence is at a low ebb.

The company, of course, is being buoyed by low interest rates and the Help to Buy scheme. Both of these catalysts are expected to remain in place over the medium term, and may offset wider fears surrounding the prospects for the housing market as Brexit moves ahead.

With the stock having a dividend yield of 4.8% from a payout that is covered over three times by profit, it appears to have a bright income investing outlook. Its P/E ratio of 7 is relatively low – even for the housebuilding sector. Therefore, investors who are able to take a long-term view may be able to generate high income returns, as well as capital growth.

FTSE 100 distribution and outsourcing company Bunzl (LSE: BNZL) saw its shares knocked back in April on the release of its first-quarter trading statement. Revenue growth has slowed to as low as 1% in some areas of the business. But I like the set-up supplying companies and organisations with stuff they use themselves such as food packaging, grocery, films, labels, gloves, bandages, safety consumables, chemicals, and products for cleaning and hygiene.

Robust incoming cash flow is a feature of Bunzl’s financial record. I’m keen on the firm’s long-term prospects, and see potential for a bounce-back in the shares during May.

Kevin Godbold does not hold shares in Bunzl.

G A Chester: Centamin

A production update in late April has increased my confidence that FTSE 250 gold miner Centamin (LSE: CEY) is set for a much-improved performance in 2019. Q1 production was above forecast, and management also said costs are trending toward the lower end of annual guidance.

Centamin’s performance last year was marred by operational challenges. But, having strengthened its operational leadership team with “top-tier technical individuals”, I’ve made the stock my top ‘buy’ on both its near- and long-term prospects.

The company is set to publish three-year outlook guidance in Q2, and I think this could be a catalyst for further improving investor sentiment.

G A Chester has no position in Centamin.

Rupert Hargreaves: Travis Perkins 

Towards the end of last year, shares in Travis Perkins (LSE: TPK) slumped to a five-year low of 975p. Since then the stock has made a remarkable recovery rising around 50%, and I think there could be much more upside on offer for shareholders here. 

At the time of writing the stock is trading at a forward P/E of 12.6, whereas for much of the past five years investors have been prepared to pay a multiple of 15 or more. City analysts are also expecting the firm’s fortunes to improve over the next two years. Analysts are forecasting net profits of £300m in 2020, up from a loss of -£86m in 2018. 

With a dividend yield of 3.3% on offer as well, it looks to me as if shares in Travis Perkins could have much more upside ahead. 

Rupert Hargreaves does not own shares in Travis Perkins.

Edward Sheldon: Reckitt Benckiser

My top stock for May is consumer goods champion Reckitt Benckiser (LSE: RB), which owns an impressive portfolio of health and hygiene brands including Nurofen, Durex and Dettol.

RB shares were trading above £65 in March, yet they have recently pulled back to the £60 level on news that healthcare company Indivior – which Reckitt used to own – had illegally boosted prescriptions for its blockbuster opioid addiction treatment. However, analysts at Barclays believe that it’s unlikely RB will face criminal charges over this issue so I think the market has overreacted here.

With the stock now trading on a forward P/E ratio of 17 and offering a dividend yield of around 3%, I think now is a good time to be buying.

Edward Sheldon owns shares in Reckitt Benckiser

Roland Head: IG Group

FTSE 250 online financial trading firm IG Group (LSE: IGG) has been hit hard by a regulatory crackdown on spread betting and CFD services. But the firm remains highly profitable and is the market leader in this sector. It’s also diversifying into new markets.

IG shares have fallen by more than 40% since August 2018. This has left the stock trading on 12 times 2019 forecast earnings, with a dividend yield of 8.3%.

Management expect this dividend to be maintained until the business returns to growth. A strategy update is due later this month. I rate the shares as a buy.

Roland Head owns shares of IG Group.

Paul Summers: Superdry

Its entire board may have resigned but I’m cautiously optimistic on founder and major shareholder Julian Dunkerton’s chances of turning retailer Superdry (LSE: SDRY) around.

While this month’s pre-close trading statement is unlikely to contain much in the way of good news, I’m heartened by Dunkerton’s commitment to transparency, reduced discounting, the shelving of its kidswear range and returning the company to its design-led roots.

The shares have been heavily sold off since January 2018 and now trade on less than 10 times earnings. That’s an attractive risk/reward play in my book and I’ve now taken a small stake in the firm with the intention of adding if the price dips again.

Paul Summers owns shares in Superdry.

Royston Wild: Smurfit Kappa

I’d be very happy to dump some cash into Smurfit Kappa Group (LSE: SKG) ahead of first-quarter financials scheduled for Friday, May 3.

The FTSE 100 packaging giant’s recovery story, driven by the realisation that the sell-off of last autumn on supply concerns was much too exaggerated, has run out of steam more recently. And I’m backing upcoming trading numbers to remind the market of what a great buy Smurfit Kappa is. 

Back in February it advised that pre-tax profits barring exceptional swelled 56% in 2018 to €938m — and for buyer appetite to pick up again. The company’s low, low rating – a forward P/E ratio of 9.1 times – certainly provides plenty of scope for some new share price gains.

Royston Wild does not own shares in Smurfit Kappa.

Manika Premsingh: AstraZeneca

FTSE 100 listed pharmaceutical major AstraZeneca (LSE: AZN) has shown good results in the first quarter of this year, making it my top share for the month of May. Its financials have disappointed in the recent years, with a steady decline in revenues, but the tide is fast turning for the cancer drugs’ producer. It has seen revenues rise consecutively for the last three quarters and operating profit is up by a super strong 68% in the latest quarter.

Even though its price to earnings ratio is still uncomfortably high at 45x, especially when compared to companies like GlaxoSmithKline at 21x, the broad decline in price over the last month suggests that it will start inching up after the latest earnings update. 

Manika Premsingh has no position in AstraZeneca.

Peter Stephens: Taylor Wimpey 

Even though housebuilder Taylor Wimpey’s (LSE: TW) share price has surged higher in recent months, it still trades on a P/E ratio of just 8. Its dividend is covered 1.2 times by net profit and stands at almost a 10% yield. With a £500m net cash balance, it appears to have a solid financial outlook.

Although house price growth has slowed in the last couple of years, the company recently reported buoyant demand for its homes. Low interest rates and favourable government policies could lead to surprisingly strong trading conditions that may further catalyse the Taylor Wimpey share price.

Peter Stephens owns shares in Taylor Wimpey

I’m not convinced. I think it’s getting harder to make money from buy to let. At the same time, I can see attractive stock market opportunities that provide exposure to the property market.

Why not buy-to-let?

Owning a home to live in is very different to running a house as a profitable rental business. With prices near record highs in many areas of the UK, homes aren’t cheap. Mortgage rates are at record lows too, so borrowing costs only seem likely to rise in the future. On top of that, maintenance and repair costs can eat into your profits.

Buy-to-let investors often lose sight of the need to turn a profit each year. If you can’t do this, then you’re paying to rent your house out, in the hope that one day you might sell it for more than you paid. That sounds a bit risky to me.

Profit from repair work

My first stock pick is builders’ merchant group Travis Perkins (LSE: TPK). This company is taking advantage of the ‘do it for me’ trend to focus on businesses which sell to tradesmen and building firms, rather than retail customers.

The Travis Perkins share price is up by 10% as I write, after the company said its sales rose by 4.8% to £6,741m last year. Pre-tax profit was also higher, climbing by 1.2% to £347m, excluding certain one-off costs.

As part of a plan to simplify the business, chief executive John Carter hopes to sell the group’s plumbing and heating business this year. This includes brands such as City Plumbing and PTS.

My view: The uncertain outlook for the UK economy is a risk. But Travis Perkins appears to be trading well and profits are expected to remain stable. The shares are priced at 12 times forecast earnings and offer a 3.6% yield. I’d be happy to buy.

Time to buy London?

My second stock might be of particular interest to buy-to-let landlords. Housebuilder Berkeley Group Holdings (LSE: BKG) specialises in building homes in London and the South East.

The group is known for its high profit margins and for the good market judgement of founder and chairman Tony Pidgley.

London property prices have fallen in some areas over the last year, with some local falls of more than 10%. But I suspect the market would stabilise quickly if a Brexit deal is secured over the next couple of months.

In any case, Berkeley’s trading appears to have remained strong and the company has been open about its profit expectations.

During the six months to 31 October, the company reported a pre-tax profit of £401m, down from £540m last year. However, controlled spending on new projects helped to lift the group’s net cash balance from £687m to £860m during the half year. And the company’s order book remained healthy, at £1.9bn.

Berkeley expects to return £280m per year to shareholders until 2025. Some of this cash may be used for share buybacks as well as dividends, but analysts are forecasting a dividend yield of 4% for this year and 4.9% next year.

My view: Based on the group’s strong track record, I’d be happy to tuck a few of these away at this level.