The Motley Fool

3 UK stocks I’d buy TODAY for 2020 and beyond

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.

Chart displaying growth
Image source: Getty Images.

If you’re looking for stocks to buy today, you have no shortage of options. There’s plenty of value to be found within the UK stock market, despite the fact that stocks have had a good run recently. Below, I list a FTSE 100 stock, a FTSE 250 one, and a high-growth AIM choice that I believe are worth buying today.

FTSE 100 champion 

Within the FTSE 100, one stock I like right now is cloud-based accounting and payroll solutions provider Sage (LSE: SGE), which is held by two of the UK’s top fund managers, Terry Smith and Nick Train.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. And if you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio.

Click here to claim your free copy now!

At first glance, Sage doesn’t look that cheap. Looking at the consensus earnings forecast for the year ending 30 September 2020, the forward-looking P/E ratio is 25. That’s considerably higher than the average FTSE 100 valuation. However, given the potential for growth here, I think that valuation is actually quite reasonable.

You see, unlike many other Footsie companies, Sage operates in a high-growth industry. According to Orbis Research, the global cloud accounting market is set to grow at a compound annual growth rate (CAGR) of around 8.6% between now and 2024. Sage also believes its total addressable market is over 70m businesses. Given that it has only 3m customers now, there’s significant potential for growth.

It’s also worth noting that Sage has a strong competitive advantage as it’s an established player within its industry and that it’s a highly profitable company. Overall, I think it’s a great stock to buy today. Remember, as Warren Buffett says, “it’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”

FTSE 250 cybersecurity stock 

Within the FTSE 250, I like the look of Avast (LSE: AVST). It’s one of the world’s largest cybersecurity companies with over 435m users worldwide. 

In terms of big investment themes, it’s hard to ignore cybersecurity. In an increasingly digital world, cybercrime has become one of the most worrying threats to society. According to experts, by 2021, cybercrime could cost the world $6trn annually, which would represent the greatest transfer of economic wealth in history.

Given this backdrop, it’s no surprise that Avast has momentum at present. First-half results last year showed adjusted revenue growth of 9.2% while adjusted EBITDA rose 6.5%.

Right now, Avast shares trade on a forward-looking P/E ratio of 18.1 and offer a dividend yield of a little over 2%. I think that’s good value for this cybersecurity stock.

AIM growth stock 

Finally, if you’re looking for growth on the AIM market, take a look at First Derivatives (LSE: FDP). It’s a technology company that operates in the FinTech/big data space and counts the likes of Lloyds Bank, UBS, and Aston Martin Red Bull Racing among its clients.

First Derivatives has grown at a fast rate over the last few years (three-year revenue growth of 85%) and City analysts expect more growth in the years ahead. For the year ending 28 February 2020, revenue is forecast to grow 10%, while net profit is expected to surge 84%. It’s worth noting that the company recently advised that it had “good momentum” across the business at the start of the second half of the year.

FDP shares currently trade on a forward-looking P/E ratio of around 32, which I believe is reasonable for a tech company operating in the high-growth data industry. I think the stock is worth buying today.

Is this little-known company the next ‘Monster’ IPO?

Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead.

Because this North American company is the clear leader in its field which is estimated to be worth US$261 BILLION by 2025.

The Motley Fool UK analyst team has just published a comprehensive report that shows you exactly why we believe it has so much upside potential.

But I warn you, you’ll need to act quickly, given how fast this ‘Monster IPO’ is already moving.

Click here to see how you can get a copy of this report for yourself today

Edward Sheldon owns shares in Sage, First Derivatives, and Lloyds Bank. The Motley Fool UK has recommended Lloyds Banking Group and Sage Group. 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.

Simply click below to discover how you can take advantage of this.