3 Last Minute ISA Buys? Barclays PLC, Glencore PLC & Chemring Group plc

Is investing in Barclays PLC (LON:BARC), Glencore PLC (LON:GLEN) and Chemring Group plc (LON:CHG) the best way to use up your ISA allowance?

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

ISAs are a fantastic way of minimising tax on capital gains. But with only two days to go until the end of the tax year, time is running out.

I’ve taken a look at three stocks which you might be considering adding to your ISA.

Better late than never

Shares in FTSE 250 defence firm Chemring Group (LSE: CHG) rose by as much as 12% this morning, after the company said that a delayed “40mm ammunition contract to an end user in the Middle East” had finally begun.

The delay to this contract was one of the reasons for Chemring’s profit warning last year. However, an advance payment now has been received and Chemring says that this contract is expected to make a “significant contribution” to 2016 revenue.

It’s good news following the recent rights issue, but Chemring shares are still worth 33% less than they were one year ago. Is the stock a buy?

Chemring trades on 12 times 2016 forecast earnings, falling to a P/E of 11.3 for 2017. Forecast earnings of about 12p are only one third of the level achieved in 2010 and 2011.

I suspect that buyers at today’s prices could be rewarded with decent gains, as profits look set to recover over the next few years.

These shares could double

Shares in no-one’s favourite bank Barclays (LSE: BARC) have fallen by 31% so far this year. The stock now sits at a 45% discount to its tangible book value and trades on just 9.5 times 2016 forecast earnings.

The City clearly has little confidence that Barclays will deliver. Despite forecasts suggesting that earnings per share will rise by 51% in 2017, Barclays trades on a 2017 forecast P/E of only 6.3.

One problem is that the bank surprised investors by cutting the dividend with this year’s results. The forecast yield for 2016 is now just 2.6%. However, I believe that chief executive Jes Staley and chairman John McFarlane are able and determined to turn the bank around.

Mr Staley’s strategy is starting to become clearer. He recently announced plans to scale back Barclays’ African business. The focus will be on the UK and US markets, plus credit cards. This makes sense to me and I’m happy to hold.

I believe that in time, Barclays shares could double from their current levels.

Up 65% already, but is there more?

Glencore (LSE: GLEN) has been one of the biggest beneficiaries of the mining rally this year. The firm’s shares have risen by 65% in just three months.

On a short-term view, I reckon this stock now looks a little pricey. However, Glencore’s profits and cash flow have held up much better than anyone expected. Full-year operating profit is expected to be around $2bn this year, and net debt is falling steadily.

On this basis, I’d argue that Glencore could deliver further gains for investors over the next few years. But the timing of these in uncertain. A full recovery may take longer than expected and we don’t yet know when Glencore will be able to restart dividend payments.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Roland Head owns shares of Barclays. The Motley Fool UK has recommended Barclays. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Illustration of flames over a black background
Investing Articles

2 red-hot UK growth stocks to consider buying in April

These two growth stocks are performing well, but can they continue to deliver for investors through 2024 and beyond?

Read more »

Charticle

Is JD Sports Fashion one of the FTSE 100’s best value stocks? Here’s what the charts say!

The JD Sports Fashion share price remains a wild ride during the first quarter. Could it be one of the…

Read more »

Investing Articles

Could the JD Sports Fashion share price double in the next five years?

The JD Sports Fashion share price has nearly halved in the past five years. Our writer thinks a proven business…

Read more »

Bus waiting in front of the London Stock Exchange on a sunny day.
Investing Articles

If interest rate cuts are coming, I think these UK growth stocks could soar!

Falling interest could be great news for UK growth stocks, especially those that have been under the cosh recently. Paul…

Read more »

Investing Articles

Are these the best stocks to buy on the FTSE right now?

With the UK stock market on the way to hitting new highs, this Fool is considering which are the best…

Read more »

Petrochemical engineer working at night with digital tablet inside oil and gas refinery plant
Investing Articles

Can the Centrica dividend keep on growing?

Christopher Ruane considers some positive factors that might see continued growth in the Centrica dividend -- as well as some…

Read more »

Smiling family of four enjoying breakfast at sunrise while camping
Investing Articles

How I’d turn my £12,000 of savings into passive income of £1,275 a month

This Fool is considering a strategy that he believes can help him achieve a stable passive income stream with a…

Read more »

Person holding magnifying glass over important document, reading the small print
Investing Articles

2 top FTSE 250 investment trusts trading at attractive discounts!

This pair of discounted FTSE 250 trusts appear to be on sale right now. Here's why I'd scoop up their…

Read more »