What are the best UK shares to buy in August 2020?

We take a look at some of the most attractive UK stocks to invest in throughout August.

British blue-chips and mid-table stocks have taken a battering as a result of the coronavirus pandemic, with the FTSE 100 and 250 still lingering 19% and 22% down respectively on a year-to-date basis.

However, there are a number of UK stocks that have remained resilient despite the myriad of challenges they face and have seen their share prices soar and even retain dividend pay-outs to shareholders.

We take a look at some of the most attractive UK stocks to invest in throughout August.

Boohoo shares likely to rebound after it addresses working conditions

The online fashion retailer saw its shares take a serious knock after allegations surfaced about its supply chain and the working conditions of factory employees in Leicester who were being paid below minimum wage.

However, some would argue that the sell-off is overdone and arguably presents a major opportunity for investors looking to buy the stock at a discount, especially when you consider the impressive growth it has already accomplished and its resilience in the face of the Covid-19 pandemic.

Prior to the allegations, Boohoo was trading at a 52-week high of 443p per share, with the stock looking particularly cheap, after closing at 270p on Wednesday.

It is also worth nothing that even prior to the sell-off, the online fashion retailer was up 37% year-to-date and even after its crash is only down 9% over that period and still outperforming the broader market.

Tesco continues to deliver a healthy dividend in dreadful conditions

The British supermarket chain hasn’t seen its share price soar amid the Covid-19 crisis, with it down 13% year-to-date. But it continues to outperform the broader market and more importantly has retained a healthy dividend while many UK stocks have been forced to cancel theirs to shore up their balance sheets.

Tesco has remained a dividend play for investors for some time now, with the stock moving very little over the last five years – trading just 2% higher to where it was half a decade ago.

The supermarket certainly has challenges ahead of it and is facing increased competition from low-cost rivals like Aldi and Lidl. But it has managed to maintain its grip on the grocery market and its adaptability amid the Covid-19 crisis highlights just how difficult it will be for challengers to take market share away from it no matter how hard they try.

AstraZeneca continues to be immune from the Covid-19 fallout

AstraZeneca has seen its shares exceed analysts’ forecasts this year, and with the company’s partnership with Oxford University seeing their vaccine produce a ‘strong immune response’ its stock could soar even higher in 2020.

AstraZeneca shares closed at £86.15 per share on Wednesday, with the stock outperforming the broader market with the drug maker trading 12% higher year-to-date, while the FTSE 100 index is down 19% over the same period.

AstraZeneca shares are likely to get a boost after its partnership with Oxford University has shown promising results from early stage trials for a potential coronavirus vaccine.

In fact, a new study published earlier this month in the scientific journal, The Lancet, showed that a team of scientists from Oxford University’s Jenner Institute and Oxford Vaccine Group have created a Covid-19 vaccine that induces a strong immune response to the virus.

The drug maker continues to see its share price go from strength to strength, with the stock exceeding analysts’ forecasts in 2020.

Analysts’ consensus price target for AstraZeneca sits at £83.31 per share, implying a potential downside for the stock of -3.4%. However, with the company’s strong performance of late and its potential breakthrough with Oxford University in finding a vaccine for Covid-19 means the future looks bright for the British-Swedish drug maker.

British American Tobacco well-placed to become a market leader in vaping

Analysts at Goldman Sachs contend that British American Tobacco (BAT) shares could rally as much as 47% after reiterating their ‘buy’ rating for the stock and issuing a target price of £40 a share earlier this month. But is the stock really capable of hitting such a lofty price target?

According to Goldman Sachs analysts, BAT could see its shares soar due to being well-positioned in next generation products (NGP) like vapes and e-cigarettes, with the company capable of emerging as a ‘relative leader’ within that market.

In a July note to investors, analysts at the US-based investment bank said that BAT was ‘amongst the highest-quality companies in Europe’ and boasted a ‘strong product and geographic portfolio’ within NGPs that could help drive signifcant revenue growth.

‘We believe a multi-category approach and strong brands leaves BAT well positioned to deliver profitable growth as the nicotine industry pivots away from combustible cigarettes,’ Goldman Sachs said. In fact, the bank forecasts that NGPs will generate £4.25 billion in revenues for the BAT in 2025.

‘We believe the direction of travel is clear, and we are confident in BAT’s competitive positioning,’ the bank added.

How to trade stocks with IG

Looking to trade the Boohoo and other stocks on our list? Open a live or demo account with IG and buy (long) or sell (short) shares using derivatives like CFDs and spread bets in a few easy steps:

  1. Create an IG trading account or log in to your existing account
  2. Enter ‘Boohoo’ in the search bar and select it
  3. Choose your position size
  4. Click on ‘buy’ or ‘sell’ in the deal ticket
  5. Confirm the trade

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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