Best British stocks to buy in January 2022

| January 6, 2022

What are the best British stocks to buy in January 2022? The UK stock market had an explosive run in 2021. Amidst the impact of the global pandemic, most of the British stocks indexes ended the year with double-digit returns. But the question is, which ones will continue to deliver in 2022?

Being a value investor, it is not surprising that I consider the fundamentals in picking the best British stocks to buy. That being said, let’s explore my top picks for the best UK stocks to buy this January.

A giant pharmaceutical company

AstraZeneca Plc (LSE:AZN) is one of the leading pharmaceutical companies in the UK. It researches, develops and manufactures drugs to treat various diseases. The company focuses on oncology, cardiovascular, renal, metabolism, respiratory, infection, neuroscience and gastroenterology. In 2020, AstraZeneca also stepped up to help fight the pandemic with its Covid-19 vaccine.

In 2021, this British stock to buy went up 18.5%. That’s much more than the FTSE 100. And is largely attributable to revenue growing by 48% in its most recent earnings report. Since the boost in sales was driven primarily by rising demand for its products, I believe this growth can continue into 2022. That’s why it’s on my best British stocks to buy list this January. 

Having said that, AstraZeneca is not without challenges. The Pharmaceuticals business requires substantial research & development (R&D) to find and market new treatments. But R&D is very capital intensive and doesn’t always lead to anything.

In fact, the pharmaceutical industry is known for expensive R&D projects to be canned at the last minute due to a lack of regulatory approvals. Or perhaps a competitor could simply come out with a better product before AstraZeneca can recoup the development cost.

In any case, with a proven track record, I think AstraZeneca could be one of the best British stocks to buy this January for my portfolio.

A top British stock to buy now

HSBC Holdings (LSE:HSBA) is one of the largest banks in the UK. It provides banking and financial services worldwide through various its various divisions. Namely, Retail Banking & Wealth Management, Commercial Banking, Global Banking & Markets, Global Private Banking, and Corporate Centre. 

My second best British stock to buy this January with a P/E ratio above 11 seems undervalued to me. That being said, I believe its share price has plenty of room to advance northward this month and beyond. Even more so since it recently got regulatory approval to buy the remaining 50% stake China life Insurance joint venture (JV)

Looking at its latest results, HSBC reported its profit before tax grew 76% compared to the same period of 2020. Needless to say, that’s impressive. And it’s why HSBC is among my top picks for the best British stocks to buy for my portfolio this month. 

But just like AstraZeneca, the firm has its risks. The banking and finance industry is getting even more competitive. With fintech companies offering more flexible solutions for commercial banking, customers may look elsewhere for their financial needs. That would obviously be bad news for the HSBC share price.

Final thoughts

As investors get acclimatised to Covid-19, its impact on the stock market will gradually wane off. While the economy continues to recover, I believe investing in these best British stocks could give me explosive returns this year.

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Prosper Ambaka does not own shares in any of the companies mentioned. The Money Cog has no position in any of the companies mentioned. Views expressed on the companies, assets and strategies mentioned in this article are those of the writer and, therefore, may differ from the opinions of analysts in The Money Cog Premium services.

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