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On one hand, UK shares can appear to be good worth in comparison with many US shares proper now.
Then again, many UK shares might look overvalued in goal phrases.
This 12 months has seen the flagship FTSE 100 index of main shares has repeatedly hit new all-time highs. But the British financial system is trying sluggish.
May or not it’s the case that, after a interval of sturdy efficiency, a weak financial outlook begins to weigh extra closely on the UK inventory market?
Restricted drivers for development
I feel it might.
In spite of everything, markets can solely defy financial gravity for thus lengthy (albeit that may typically be fairly lengthy!)
Whereas UK shares as a complete might not at present look overvalued, what I’m not seeing is obvious drivers to assist preserve pushing them upwards, given a reasonably weak financial outlook.
As some buyers transfer cash out of the US attributable to political uncertainty and look to redeploy it in different markets, UK shares may gain advantage.
However when it comes to underlying enterprise efficiency, the UK market as a complete at present lacks apparent development drivers. I feel which will present via in some unspecified time in the future when it comes to weaker investor enthusiasm as UK share costs preserve rising.
Market timing is a mug’s sport
Nonetheless, there isn’t a dependable indication of when which will occur.
On high of that, I could possibly be incorrect about the place the financial system goes.
To date, 2025 has been illustrative of this on the world degree. There have been a number of considerations concerning the financial system, however markets have largely taken them of their stride.
Right here’s my strategy
Both approach, my strategy is to not attempt to time the market, however moderately at all times to see whether or not I can spot high-quality companies promoting for significantly lower than I feel they might finally be value.
Clearly, if the inventory market crashes, I will likely be joyful to attempt to scoop up some bargains.
However even when the general market has been doing properly – like now – I feel some UK shares might proceed to supply me potential worth.
I’ve been shopping for
For instance, one share that has been doing properly recently is transport specialist Journeo (LSE: JNEO).
Information at present (18 September) of a brand new buy order pushed the Journeo share value as much as its highest degree in years. It’s up 76% to date this 12 months.
It now trades on a price-to-earnings ratio of 20. That doesn’t appear clearly low cost.
Nevertheless, whereas bus shelter timetable info won’t be the type of tech product that units the NASDAQ alight, Journeo is amongst UK shares benefiting from pretty easy however sensible real-world purposes of proprietary expertise.
With public sector spending at excessive ranges, I feel the corporate might hopefully proceed to win a number of contracts. Every one it wins not solely boosts revenues, but in addition helps increase its credibility with different potential purchasers.
An excessive amount of dependence on native authority clients is a threat, if they should begin slicing their budgets. However Journeo has a number of potential for worldwide development, too, as its work with the New York Metropolis subway demonstrates.
That valuation is greater than I might usually like. However I hope subsequent week’s interim outcomes might convey but extra excellent news concerning the firm’s outlook. I’ve been shopping for its shares.
