My top 2 UK shares to buy before the end of August! – Motley Fool UK

The stock market has been pretty volatile in recent months, but closed above 7,500 on Wednesday. Despite this, I see now as a good time to buy UK shares.
Image source: Getty Images
UK shares haven’t performed particularly well this year, with exceptions in oil and mining. And while the FTSE 100 might have closed Wednesday above 7,500 for the first time in two months, many stocks are still down in 2022.
The thing is while the FTSE 100 might be back up to this benchmark figure, oil and mining stocks have delivered a lot of the growth for the index this year.
Other stocks have been pulled down amid concerns about the health of the global economy, as well as the British economy, ongoing concerns about Brexit, and political turmoil.
But I see now as a good time to invest while stocks are down and before the eventual recovery. So here are two UK stocks I’m buying before the end of August.
Lloyds (LSE:LLOY) is still trading far below its 52-week high, despite improving throughout the year. The performance of Lloyds and other British banks tends to reflect the growth of the UK economy.
But it’s a little different right now. Amid 1970s-esque inflation, interest rates are rising in an effort to slow economic activity. Higher interest rates mean higher margins, and Lloyds is already benefiting here.
UK mortgages represented 61% of Lloyds’ total gross lending at 2021 year-end. The bank is clearly heavily focused on the British market. And mortgage repayments are already soaring in the UK as a result on rate rise.
The average repayment was up £70 a month before the last 50 basis point hike. So it’s clear these incremental changes in mortgage rates will have a profound impact on the bank’s income.
As the economic conditions get worse, there will be concerns about new mortgage volumes and the growth of bad debt. However, the forecast recession is likely to be quite mild, albeit prolonged. So I’m still backing Lloyds and I’d buy more today.
I’m also buying Unilever (LSE:ULVR) for its defensive qualities and its non-pound earnings. In July, the fast-moving consumer goods giant said that profits were up during the first half as sales revenue grew 8.1%, but volume fell 1.6%. The business, which owns brands such as Dove, Vaseline, and Magnum ice cream, lifted its prices by 9.8% in H1, compared to the same period of 2021.
Unilever expects to beat its previous forecast of sales growth between 4.5% and 6.5% for the year as a whole. The recent data highlights the importance of a strong brand and underlined Unilever’s ability to pass on rising costs to customers.
Unilever also sells goods in 190 countries, so a weak pound may help inflate revenue.
Going forward, there may be some challenges with recession forecasts looming. Unilever has defensive qualities but a prolonged recession is unlikely to be good for the business. Despite this, I’m confident it will perform better than other business in such an environment. And this is why I’m buying more Unilever stock.
The firm has been criticised by some big investors for focusing too much on ethical issues and not enough on driving up profits in recent years. But there have been some changes and hopefully we will see the group work harder for its shareholders in the future.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be considered so you should consider taking independent financial advice.
James Fox owns shares in Lloyds and Unilever. The Motley Fool UK has recommended Lloyds Banking Group and Unilever. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
| Dr. James Fox
The Lloyds share price has been pretty volatile over the past month. But I’m backing the stock to keep rising…
Read more »
| Royston Wild
Centrica is tipped to grow dividends strongly after resurrecting its payout policy this year. Should I buy the FTSE 100…
Read more »
| Charlie Keough
This Fool is on the lookout for FTSE 100 stocks that he can buy today and that might serve him…
Read more »
| Paul Summers
As a long-term investor, Paul Summers has been busy compiling a list of growth stocks to buy in these troubled…
Read more »
| Alan Oscroft
There are some very low FTSE 100 P/E valuations out there at the moment. And some top stocks offer big…
Read more »
| Dr. James Fox
Dividend stocks form the core part of my portfolio. But how can I use them to deliver £500 or more…
Read more »
| Harshil Patel
Against soaring inflation, our writer considers several FTSE 100 dividend payers for his Stocks and Shares ISA that have 8%+…
Read more »
| Christopher Ruane
Eurasia Mining shares have lost over 80% of their value in just 12 months. They still don’t tempt our writer…
Read more »
View All
Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be considered so you should consider taking independent financial advice.
To make the world Smarter, Happier, And Richer
Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show and premium investing services.
Read more about us >

We have taken reasonable steps to ensure that any information provided by The Motley Fool Ltd, is accurate at the time of publishing. Any opinions expressed are the opinions of the authors only. The content provided has not taken into account the particular circumstances of any specific individual or group of individuals and does not constitute personal advice or a personal recommendation. No content should be relied upon as constituting personal advice or a personal recommendation, when making your decisions. If you require any personal advice or recommendations, please speak to an independent qualified financial adviser. No liability is accepted by the author, The Motley Fool Ltd or Richdale Brokers and Financial Services Ltd for any loss or detriment experienced by any individual from any decision, whether consequent to, or in any way related to the content provided by The Motley Fool Ltd; the provision of which is an unregulated activity.
The value of stocks, shares and any dividend income may fall as well as rise and is not guaranteed, so you may get back less than you invested. You should not invest any money you cannot afford to lose, and you should not rely on any dividend income to meet your living expenses. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, administrative costs, withholding taxes and different accounting and reporting standards. They may have other tax implications, and may not provide the same, or any, regulatory protection. Exchange rate charges may adversely affect the value of shares in sterling terms, and you could lose money in sterling even if the stock price rises in the currency of origin. Any performance statistics that do not adjust for exchange rate changes are likely to result in an inaccurate portrayal of real returns for sterling-based investors.
Fool and The Motley Fool are trading names of The Motley Fool Ltd. The Motley Fool Ltd is an appointed representative of Richdale Brokers & Financial Services Ltd who are authorised and regulated by the Financial Conduct Authority (FRN: 422737). In this capacity we are permitted to act as a credit-broker, not a lender, for consumer credit products. We may also publish information, opinion and commentary about consumer credit products, loans, mortgages, insurance, savings and investment products and services, including those of our affiliate partners. We do not provide personal advice and we will not arrange any products on your behalf. Should you require personal advice, you should speak to an independent, qualified financial adviser.
The Motley Fool Ltd. Registered Office: 5 New Street Square, London EC4A 3TW. | Registered in England & Wales. Company No: 3736872. VAT Number: 188035783.
© 1998 – 2022 The Motley Fool. All rights reserved. The Motley Fool, Fool, and the Fool logo are registered trademarks of The Motley Fool Holdings Inc.

source

Leave a Comment