These 2 UK shares are on a tear. Here’s what I’d do

first_img Manika Premsingh | Monday, 17th May, 2021 | More on: CER DPLM The high-calibre small-cap stock flying under the City’s radar Manika Premsingh has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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. Our 6 ‘Best Buys Now’ Shares Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. When a UK share’s performance stands out, I often sit up and take notice. This is because typically, such spikes follow positive developments at the company concerned. These in turn may positively impact their share prices in the days and months to come. Here are two such stocks I’ve explored after their fast rise in early trading today. 5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Cerillion rallies as profit doublesThe first is Cerillion (LSE: CER), which provides business software solutions, including those for billing and customer relationship management. As I write, it’s up 11% after it released results for the half-year ending March 31. A look at these makes it clear why investors are flocking to the stock. Its revenue is up 26% from the half-year ending March 31 2020 and pre-tax earnings are up a whole 124%. But even better are Cerillion’s prospects. Its new business pipeline is up 9%. According to CEO Louis Hall, the company is “very confident of continuing revenue and earnings progression”. While there appears little doubt that the company will continue to perform, it’s super-pricey as well. With a price-to-earnings (P/E) ratio of 76 times, its share price is at all-time highs. It has risen more than two times in the last year alone. I think this is one I’d buy on dips. Diploma raises guidanceAnother UK share on a tear today is Diploma (LSE: DPLM), which provides technical products from wiring to cylinders and medical instruments to customers across industries. It’s up over 8% now from its last close after it reported robust results for the half-year ending March 31 as well. Its revenue is up by 29% from the corresponding half-year of last year and its statutory operating profit is up by 10%. It also talks of “exciting trends” for the second half, and expects “full-year results significantly ahead of our previous expectations”.Much like Cerillion, Diploma’s share price is now at all-time-high levels. In the last year alone, it has risen by 68%. It too is trading at an elevated P/E of 67 times. In essence, both companies have the same story. They’re defensive stocks that have performed well and have bright prospects. My conclusion is no different. It’s a buy-on-dip stock as well for me. Sorry to sound like a broken record. Would I buy these UK shares?But here is one thing I would bear in mind as a growth investor. Last year was particularly good for ‘safe’ stocks like Cerillion and Diploma that fulfil near-essential products for businesses to function. But cyclical stocks from pubs to cinemas have started looking promising to investors in the ongoing stock market rally. As their prospects improve on reopening, I reckon we’ll see more investor interest in them. With these two UK shares, yes, I’m looking for dips as buying opportunities. But I also want share price growth. Any share price increases may be relatively muted later in 2021. I’d keep that in mind before I’d buy them.  Simply click below to discover how you can take advantage of this. Adventurous investors like you won’t want to miss out on what could be a truly astonishing opportunity…You see, over the past three years, this AIM-listed company has been quietly powering ahead… rewarding its shareholders with generous share price growth thanks to a carefully orchestrated ‘buy and build’ strategy.And with a first-class management team at the helm, a proven, well-executed business model, plus market-leading positions in high-margin, niche products… our analysts believe there’s still plenty more potential growth in the pipeline.Here’s your chance to discover exactly what has got our Motley Fool UK investment team all hot-under-the-collar about this tiny £350+ million enterprise… inside a specially prepared free investment report.But here’s the really exciting part… right now, we believe many UK investors have quite simply never heard of this company before!center_img These 2 UK shares are on a tear. Here’s what I’d do  Click here to claim your copy of this special investment report — and we’ll tell you the name of this Top Small-Cap Stock… free of charge! Image source: Getty Images Enter Your Email Address I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. See all posts by Manika Premsinghlast_img read more

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