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The 5 best shares I’d buy for my portfolio in 2021

Rupert Hargreaves
·3-min read
Bye bye 2020 and farewell on toilet paper
Bye bye 2020 and farewell on toilet paper

Last year proved to be an extremely challenging time for investors. However, I’m confident that in 2021, the world should begin to move on from the coronavirus crisis. And with that in mind, here are the five best shares I’d buy for my portfolio this year.

The 5 best shares

I want to buy companies that may prosper no matter what happens over the next 12 months. Companies with a defensive nature and a strong reputation with customers could be the best for this goal.

A couple of businesses that stand out immediately are insurance groups Admiral and Prudential. Both of these companies have relatively defensive business models. Car insurance in the UK is a legal requirement. This gives Admiral a large, captive customer base.

Meanwhile, pension and life insurance provider Prudential is one of the world’s largest and most respected providers of these products. It is currently focusing on Asia, where the business has a strong and growing presence.

I believe these defensive qualities should help these businesses outperform in 2021.

Portfolio acquisitions

Two other companies I have my eye on for this year are soft drinks producer A.G. Barr and Mr Kipling owner Premier Foods.

A.G. Barr was able to perform relatively well in 2021 thanks to the performance of its flagship Irn-Bru brand. I expect demand for this product to remain high in 2021. What’s more, the company has a long history of generating attractive returns for investors through the good times and the bad.

This track record gives me confidence that the business should be able to sail through 2021, which is why it features on my list of the best shares to buy for the year ahead.

Premier Foods, on the other hand, has a mixed track record. The company over-expanded before the financial crisis. It ended up with too much debt and has been struggling to pay off creditors ever since. But it seems as if the group’s prospects changed dramatically last year. A surge in profitability allowed management to reduce debts and a landmark pension agreement also cleared other obligations.

With liabilities greatly reduced, the company can now afford to reinvest for growth. I think this may lead to further profit and share price growth in the years ahead.

Takeaway giant

The final company on my list of the five top shares to buy for 2021 is Just Eat Takeaway. This was one of the best-performing stocks of 2020, and I reckon it’ll continue to charge ahead this year. Rising demand for takeaway food services has pushed the organisation’s profitability higher, allowing it to go on an acquisition spree.

As Just Eat continues to expand, economies of scale may help the business grow even faster. So, while the stock might look expensive after its recent performance, I’m extremely optimistic about the business’s prospects over the next 12-24 months.

The post The 5 best shares I’d buy for my portfolio in 2021 appeared first on The Motley Fool UK.

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Rupert Hargreaves owns shares in Prudential and Admiral. The Motley Fool UK has recommended Admiral Group, AG Barr, Just Eat Takeaway.com N.V., and Prudential. 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