3 no-brainer UK shares to buy in February

hVIVO (LSE HVO) recently moved from the realm of penny stocks to the world of small-caps. This comes after the stock surged 41% in January. However, it remains down 57% since reaching a high of 38p in April 2021.

The company is a world leader in infectious and respiratory disease vaccine trials and therapeutics using human challenge trials. These clinical trials involve exposing healthy volunteers to the pathogen that the vaccine is trying to protect against. The company carried out these challenging studies at a specialist facility in London.

So why the recent turnaround in stocks? Yes, hVIVO signed a larger contract with a global biopharma client, which recently raised its guidance. Full-year revenue for 2022 is £50.6m, up 30% year-on-year.

Importantly, this is profitable growth, with the company expecting a full-year EBITDA margin of at least 17%. In addition, the group’s order book soared to record levels, rising 60% year-on-year to £76m. This represents a six-fold increase from 2020.

With shares at 16p and a market cap of £110m, I think hVIVO has the potential to go higher from here. Despite the inherent riskiness of human challenge trials, I have been loading up on stocks.

The prospect of renewed war in Europe sent many defense stocks soaring last year. Indeed, BAE system rocket 54% in 2022, making it the best stock of all FTSE 100. However, stocks in electronic warfare specialist Chemring Group (LSE: CHG) is down 18% in six months.

As a reminder, the company develops advanced technological solutions, including products used to manipulate radar, sonar, and other detection systems. Military aircraft can use the technology to deceive surface-to-air missiles. It also sells products to detect biological and chemical weapons.

Needless to say, this item has been in high demand lately. The group’s full-year revenue to October 31 rose 13% year-on-year to £442.8m. Underlying pre-tax profit rose 12% to £62.5m. However, Chemring’s order book is growing, growing by 30% year-on-year to £650.9m.

One risk here is customer concentration, as around 80% of the company’s sales come from the UK and the US. Any big cut to military spending in either country could hurt sales. But I doubt that will happen. Global military spending is forecast to rise 8.6% this year, according to data provider Janes.

So the stock seems like a no-brainer buy to me. That’s why I recently added it to my own portfolio.

The last share to buy is Warehouse REIT, a real estate investment trust focused on ‘last mile’ warehouses. The stock has fallen 41% in the past year, with investors fearing a recession and higher interest rates could threaten rental income and the value of property portfolios. This risk has not disappeared.

However, the new lettings have increased the portfolio’s occupancy rate to 93.3%, which seems solid to me. SHOP’s next dividend payment results.