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2 top UK shares I’d buy in an ISA for the new bull market

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Much like the stock market crash seen in 2020, the 2022 correction presents a rare investment opportunity to buy UK shares. History shows us that a new bull market eventually follows each correction or crash. And it’s during this time when enormous wealth can be made by brave and prudent investors.

Buying when stocks are falling is a scary prospect. But it’s something I’ve been doing in my Stocks and Shares ISA since the start of the year. And while I may be taking a loss today, I feel I’ll be able to generate significant returns in the future. Let’s explore two UK shares that are on my portfolio buy list.

Best UK shares to buy for a comeback?

Investing in gaming stocks is a risky move. And, recently, Frontier Developments (LSE:FDEV) perfectly demonstrated why. The poorly-received launch of its Elite Dangerous: Odyssey title, combined with underwhelming pre-order sales of its Jurassic World Evolution 2 project, resulted in a sharp cut in revenue guidance. And that translated into the stock price plummeting.

With a lot of capital invested into single projects, any duds can have enormous financial consequences. That’s something I feel every investor ought to know before entering this stock market sector. However, Frontier has a reputation for continually improving its games even after release. And it seems this reputation continues to be well-founded.

Sales of Jurassic World Evolution 2 have picked up and reached 1.3 million units. Player reviews for Odyssey have been improving steadily as bugs and performance issues are addressed. And its publishing arm saw huge success with the launch of Warhammer 40,000: Chaos Gate Deamonhunters in May.

So it’s not surprising to hear that the company hit record revenues, growing by 26%. And yet shares of this UK game developer are still down 40% over the last 12 months, due of the stock market correction, among other factors. Pairing that with an impressive line-up of new game releases over the next two years makes this stock look like a bargain buy for my portfolio. At least, that’s what I think.

Constructing profitability

While the pandemic created quite a few disruptions to the construction industry, most of those headwinds have largely evaporated. Just looking at the latest results from Somero Enterprises (LSE:SOM) shows clear evidence of this. Why? Because revenue and pre-tax profits surged by 51% and 81% respectively.

As a reminder, the group designs, develops, and sells concrete-laying screed machines, drastically reducing the manpower and time required to complete industrial construction projects. And with operations based in the United States, Somero has been successfully capitalising on the $1trn infrastructure government spending plan.

Yet shares of this UK-listed enterprise are still down 12% over the last year. There are looming concerns that a recession will significantly impact operations. And these fears are not entirely unfounded.

However, while a recession may cause short-term disruption, I believe the long-term strategy remains untainted. And with $42m of cash on its books to weather the potential storm, I’m willing to take the risk and buy this business at a double-digit discount.

The post 2 top UK shares I’d buy in an ISA for the new bull market appeared first on The Motley Fool UK.

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Zaven Boyrazian has positions in Frontier Developments and Somero Enterprises, Inc. The Motley Fool UK has recommended Frontier Developments and Somero Enterprises, Inc. 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.