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2 of the best UK shares (including a FTSE 100 stock) to buy in May

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Royston Wild
·3-min read
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I’m on the lookout for top British stocks this May. Here are a couple of what I think are the best UK shares to buy. They’re on my stocks and shares radar today.

A FTSE 100 firework

An improving advertising market suggests to me that ITV (LSE: ITV) could be one of the best buys today. This FTSE 100 stock is due to release first-quarter financials on Wednesday, May 5, a release I think could provide the broadcaster’s share price with a dose of rocket fuel. The ITV share price is up around 70% over the past 12 months but it has stagnated more recently. A fresh reminder of solid industry trends could prompt a renewed rush of investor interest.

The UK blue-chip share declared in early March that “we are seeing more positive trends in the advertising market in March and April,” and added that “the majority of our programmes are now back in production.” A robust update from industry peer STV Group last week has underpinned my faith in another solid update from ITV this week too. The Scottish broadcaster said that the recovery in the advertising market has come in “ahead of expectations.” Trading updates from other advertising-related businesses like FTSE 100-quoted WPP have also indicated improvements in broader marketing spending.

Host of ITV quiz show Catchphrase Stephen Mulhern
Host of ITV quiz show Catchphrase Stephen Mulhern

Again, ITV’s share price has risen terrifically during the past year. Yet the company still trades on a reasonable price-to-earnings (P/E) ratio of 13 times for 2021. This leaves plenty of space for a fresh re-rating of the FTSE 100 firm’s stock. There’s a lot I like about ITV, and as a long-term UK share investor I particularly like the brilliant progress made by its expanding ITV Studios arm.

I’m mindful, however, of the rising threat of streaming giants like Netflix, Disney and Amazon and what this could mean for ITV’s profits in the years ahead. It’s no longer the dominant name in commercial broadcasting it once was so that’s a major risk.

Another best share to buy?

IMI (LSE: IMI), which is a FTSE 250 engineer, updated the market just last week. And it closed at its most expensive price for seven years as a result. IMI announced that it had enjoyed “strong performance in the first quarter across all three divisions” and paid tribute to the “improving trends in our major end markets” too. This robust trading encouraged the firm to hike its full-year earnings expectations too.

As my colleague Jonathan Smith said, such a robust statement so early in the year is unusual. It leads me to believe that further upgrades could be in the offing too, leaving the door open to more share price strength (the IMI share price has more than doubled over the past 12 months). And this could make it one of the best UK momentum shares to buy right now.

Bear in mind, though, that the company currently trades on a forward P/E ratio of 23 times. This sort of elevated rating could cause the share price to retrace if trading momentum begins to lose steam.

The post 2 of the best UK shares (including a FTSE 100 stock) to buy in May appeared first on The Motley Fool UK.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Royston Wild has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Amazon, Netflix, and Walt Disney. The Motley Fool UK has recommended IMI and ITV and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. 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.

Motley Fool UK 2021