It’s been a rocky start for some UK shares in 2022. This week, the market started gaining momentum again, but the FTSE 100 index is still flat since the beginning of the year. Yet other stocks haven’t been as lucky against the elevated level of volatility.
The culmination of inflation and rising interest rates has built up a significant degree of uncertainty. And as history has proved time and time again, uncertainty and growth stocks don’t work well together. But this may have created excellent buying opportunities for my portfolio. So, with that in mind, let’s explore two UK shares that I’m thinking of buying right now.
Building wealth with science
Judges Scientific (LSE:JDG) is quite a niche business. It develops scientific instruments used throughout various industries, including pharmaceutical, automotive, even telecommunications. One example would be its tools for testing heat profiles of lithium-ion batteries to verify product safety.
Over the last 12 months, this UK share has delivered an impressive return of around 20%. Yet since the start of the new year, it’s down by about 10%. What happened?
The drop-off seems to have been triggered by CEO David Cicurel after he sold £3.2m worth of shares. Seeing a director offload a large chunk of ownership is not exactly an encouraging sight. After all, it does suggest the valuation may be too rich. And with tensions already running high thanks to the volatile markets, I’m not surprised to see the stock take a hit.
But I think investors may have overreacted. There are plenty of reasons why a director might sell part of their position. And Mr Cicurel still owns over 10% of the company. If he is willing to hold on to such a stake in the business, that signals to me he believes the group can continue to deliver impressive performance. That’s why I think shares of this UK business could be some of the best to buy now for my portfolio.
An oversold UK share?
Staying on the theme of oversold stocks, Frontier Developments (LSE:FDEV) could be another in this category. Unlike Judges Scientific, its 12-month performance has been fairly abysmal, with shares of the UK game development studio collapsing by nearly 60%. Even since 2022 started, the downward trajectory has continued.
This rapid sell-off was triggered last year after management announced it was cutting guidance due to underperforming sales of its recently released Jurassic World: Evolution 2. Generally, when a growth company announces slowing growth, it’s not a good sign, leading to investors making their displeasure known. And Frontier was no exception. But are these UK shares now on discount?
As frustrating as slowing growth is to see, this may only be a temporary issue. The lower post-launch sales volumes for the group’s new game were isolated only to the PC platform. And with the new Jurassic World movie being released later this year, sales are expected to pick up very soon.
Meanwhile, with other titles in the pipeline scheduled for release over the next three years, the top line could soon be expanding at an accelerated pace. That’s why I’m considering adding more of these shares to my portfolio.
Zaven Boyrazian owns Frontier Developments. The Motley Fool UK has recommended Frontier Developments and Judges Scientific. 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.
