3 exciting UK shares to buy now

Professional investor Chris McVey of the FP Octopus UK Multi Cap Income Fund picks three attractively valued, exciting UK shares.

The FP Octopus UK Multi Cap Income Fund blends UK shares from across the entire British equity market to construct a portfolio capable of above-market earnings and dividend growth throughout the economic cycle.

The fund seeks to generate an attractive and growing dividend yield. It benefits from being able to pick stocks where we see the most attractive opportunities at the most exciting valuations, regardless of a company’s size. 

Following the recent market turbulence, many companies have seen their share prices disconnect from the underlying business performance, particularly within the small and midcap sectors

We are therefore fortunate to have a large number of exciting opportunities on very attractive ratings. 

Built on firm foundations 

One is Brickability (Aim: BRCK), the UK’s leading brick factor and building-materials distributor. The group manages more than 20% of the UK’s brick supply chain, giving it true benefits of scale. 

The business recently reported annual sales growth of 187%, with adjusted earnings per share increasing by over 80%. As UK shares go, this rate of growth is extraordinary. 

Given the strong start to the new financial year and ongoing strong demand, we expect Brickability to continue to excel. Despite this strong operational progress, the group’s shares have fallen by over 16% year-to-date, and now trade on a price/earnings (p/e) ratio of only eight for the year to March 2023. The stock also yields 3.8%

US tech hangover hitting UK shares

Next Fifteen Communications (Aim: NFC) is a leading data-led advertising and marketing services business. It is a well-established platform, having recently turned 40, and now operates from 15 countries, employing almost 3,000 people. 

The firm’s latest update showed strong revenue growth increasing by around 68% year-on-year for the three months to April 2022. Management highlighted that trading continued to be strong in May and suggested that adjusted profits before tax were once again ahead of their expectations. 

Despite these strong operational fundamentals, the stock has slipped by 30% in 2022. This could partly be a result of the group servicing some of the world’s leading growth companies, including many of the largest US technology names, which have been hurt by rising inflation and interest rates. 

But we expect Next Fifteen’s fundamentals to reassert themselves and for the shares to rerate from here. 

Engineering long-term growth 

Renew Holdings (Aim: RNWH) is a UK-focused engineering-support services provider. It operates on some of the country’s most challenging infrastructure networks, including rail, water and energy. 

The business operates with strong market positions underpinned by long-term, non-discretionary spending cycles. The company’s commercial agreements are also partly pegged to inflation, which allows it to better manage the challenge of increasing prices that are inflicting pain on many other UK shares. 

The group has seen revenues rise by over 13% in the latest half-year report. Given the ongoing need for infrastructure spending in the UK, partly driven by the levelling-up agenda and the “greening” of the economy, we think Renew will continue to make significant progress.

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