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?

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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.

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