Stock market recovery: 10 British stocks I’d buy in December

Jonathan Smith
·3-min read
Financial technology concept. Stock market crash.
Financial technology concept. Stock market crash.

Just because we’re heading towards the end of the year doesn’t mean I get to take my foot off the accelerator with regards to investing. Global stock markets had an incredibly strong November. For example, US markets had their best performance in over three decades. Here in the UK, the stock market recovery was also in full swing. The FTSE 100 index has gained around 13% over the past month. So looking forward, which are the British stocks that I think are worth buying right now?

Brexit winners

One of the main themes I’m trying to capitalise on at the moment is the potential for an upcoming Brexit deal. Talks are going down to the wire, but in my opinion it looks more likely than not that we can achieve a deal. In this case, the stock market recovery in the UK should be boosted from British stocks. For example, financials like Lloyds Banking Group and Barclays could perform strongly. Companies in the property sector such as British Land Co and Taylor Wimpey are also on my watchlist.

What I’m trying to achieve with these companies is getting outperformance above the general FTSE 100 index. These sectors and specific firms have shown high sensitivity to Brexit headlines in the past. Given the high domestic exposure the businesses have, any boost for the UK via a trade deal would likely drive the share prices higher. Even if the FTSE 100 continues the stock market recovery into December, with a Brexit deal I feel the businesses mentioned above will be leading the charge.

Vaccine boost

Another theme that I believe in is the possibility of a viable vaccine rollout in the short term. This is a positive for almost all corporates, but it will benefit the retail and travel sectors the most. These businesses have high exposure to public interaction, so a vaccine should aid things here. As a result, I’m keeping an eye on British stocks such as easyJet and Burberry. Looking into the FTSE 250, JD Sports Fashion and Go-Ahead Group are other good examples.

There are already encouraging signs that these businesses are starting to perform well. I recently wrote a piece on Burberry. Comparable store sales were down 45% in Q1 and 6% in Q2. However, Q3 is expected to show a positive growth figure as stores reopened. The second lockdown in Q4 would be another blip, but I’m looking at the bigger picture. If these sectors are already starting to get back on their feet, then a vaccine rollout is only going to enhance the chances of a good financial bounce-back in 2021.

The stock market recovery

The above eight companies I’ve mentioned could all benefit from specific factors this month and beyond. The final two businesses I like are more defensive in nature. This is to protect me in case the stock market recovery falters, or the global economic situation worsens. I’d look to buy J Sainsbury and United Utilities on this basis. Both firms provide essential goods and services that should see constant demand, regardless of how the economy performs.

The post Stock market recovery: 10 British stocks I’d buy in December appeared first on The Motley Fool UK.

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jonathansmith1 has no position in any of the shares mentioned. The Motley Fool UK has recommended Barclays, British Land Co, Burberry, and Lloyds Banking Group. 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.

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