Investors looking for shares to buy today face a range of options. Indeed, there are 250 different companies in the FTSE 250 alone, and that’s less than 10% of the total number of businesses listed on the London Stock Exchange.
Of course, buying stocks and shares may not be for everyone. Investors should only invest what they can afford to lose. Returns are never guaranteed. However, I’m comfortable with the level of risk investing involves. As such, I’m always looking for opportunities.
And with that in mind, here are my top three shares to buy today.
FTSE 250 stocks
Spirent Communications (LSE: SPT) provides engineering services for the information technology sector. The company has recently been rolling out infrastructure to help with the 5G data revolution. Demand for its services is currently running high. City analysts forecast earnings growth of 10% for the business in 2020.
As the world becomes more and more reliant of technology, I think the business will see a prolonged period of growth. That’s why I believe this is one of the best shares to buy today and would add it to my portfolio.
While the company does face risks, such as increased competition and rising costs, it has managed these challenges well in the past, although that doesn’t guarantee future performance. What’s more, if the corporation makes a grave mistake, which ends up causing a client to lose data, it could suffer severe reputational damage, so that’s something I’m going to watch out for.
Shares to buy today
Thermal processing is a niche technical industry. However, it’s one Bodycote (LSE: BOY) specialises in, providing heat treatment services for clients worldwide. Bodycote is one of the largest players in this sector globally, giving it a competitive advantage. It can offer customers lower prices due to economies of scale. Moreover, customers can trust the business to produce a quality product.
These qualities have helped the FTSE 250 business go from strength to strength over the past few years.
However, the company is exposed to similar risks as Spirent. It may have a good reputation, but that means the pressure is on to maintain quality. Customers could leave the business if it decides to cut corners to improve profit margins. An economic downturn may also lead to reduced demand. Despite these risks, I think this is one of the best shares to buy today, based on its competitive advantages.
FTSE 250 engineering group Weir (LSE: WEIR) has similar qualities to the two companies outlined above. It produces critical components for the resource industry, such as pipes and valves. These aren’t the sort of products customers want to go wrong, as the costs of a broken pipe can be high. That’s Weir’s advantage. It’s a trusted provider that has been engineering products for clients for decades.
Unfortunately, this industry is highly cyclical. The company’s earnings can and do gyrate significantly based on economic cycles. Therefore, a prolonged economic downturn may cause significant pain at the group. This suggests the business may not be suitable for all investors.
Nevertheless, companies with competitive advantages like Weir are few and far between. That’s why I’d buy this engineer despite its exposure to the highly cyclical resource industry.