While some shares have had a banner 2022, many have not. That offers some potential bargains for my portfolio. Here are three UK shares that I would buy for my portfolio now if I had spare cash to invest. Each one has fallen 40% or more in 2022, so I will get a lot more for my money than if I had bought them at the start of the year.
JD Sports
In recent months, shares in retailer JD Sports (LSE: JD) have had a positive streak, increasing 40% in under two months.
Despite that, the JD Sports share price remains 42% lower than it was at the start of the year. Over a 12-month period, the decline has been 45%.
I think the recent recovery reflects a shift in investor sentiment, with some in the City now feeling the shares had been beaten down too much for a company with such a strong and proven business model. JD expects to record a headline profit before tax and exceptional items for the year equal to last year’s all-time record.
With its large customer base, strong brand and multinational reach, I think JD Sports has the makings of a business that can go from strength to strength in coming decades. Consumer spending slowing is a threat to sales, while cost inflation may hurt profitability. But I continue to be positive about the outlook for the company.
Jupiter
2022 has been an awful year to be a Jupiter (LSE: JUP) shareholder in many ways, with the shares more than halving in price. They now stand 47% below their level a year ago.
However, I think there have been some bright spots too. Jupiter maintained its large dividend, although that is unlikely to be the case next year. New management set out a fresh strategy and also detailed plans to put the dividend on a more financially sustainable footing. In the long term I think that should be good for the health of the firm. Meanwhile, a share buyback suggests management confidence. It could also help boost earnings per share as the number of shares in circulation falls.
There are still large risks here, from a decline in assets under management to the weakening appeal of the Jupiter brand among some investors. Management has a lot of work to do. But I see long-term strengths at one of the country’s best-known asset managers.
Scottish Mortgage
My third pick would be the Scottish Mortgage Investment Trust (LSE: SMT). These UK shares have fallen 41% so far in 2022, making for a 47% decline over the past 12 months.
As an investor in a wide range of tech firms like Tesla and MercadoLibre, the asset value of the trust has been hurt badly by falling share prices in the tech sector. I see a risk that that could continue in the coming months and possibly longer.
From a long-term investing perspective, however, I continue to like the trust’s proven ability to find winning, innovative business models at an early stage then benefit from their growth by investing in them. I continue to see long-term potential from this approach. I would buy Scottish Mortgage shares for my portfolio if I had spare cash to invest.
The post 3 UK shares I’d buy after each fell over 40% this year appeared first on The Motley Fool UK.
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C Ruane has positions in Jd Sports Fashion Plc and Jupiter Fund Management Plc. The Motley Fool UK has recommended Jupiter Fund Management Plc, MercadoLibre, and Tesla. 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.