Best shares to buy now: 3 stocks I’d snap up today

Global stock markets are having a fantastic run this year. Here, Edward Sheldon lists three growth shares he’d buy right now.

| 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.

Shares are having a great run at the moment. This year, the FTSE 100 is up about 8%. Meanwhile, the S&P 500 is up about 12%.

Here, I’m going to highlight three shares I’d buy right now. I think all three have considerable growth potential in the current environment.

A top UK tech stock

One UK stock I think looks attractive at the beginning of May is Gamma Communications (LSE: GAMA). It’s a leading provider of unified communication solutions.

The reason I’m bullish on Gamma is that I expect the ‘hybrid’ working model – where people work from home a few days per week – to become far more common. Gamma should benefit from this trend. Its communication solutions, which enable employees to work remotely, are well-suited to organisations that have a flexible working setup.

Recent results for 2020, were very impressive. For the year, revenue was up 20%. Meanwhile, adjusted earnings per share were up 26%. Looking ahead, the company said it’s “positive about the outlook for the group in 2021 and beyond.”

There are risks to the investment case, of course. One is the threat of competition – this is a competitive industry. Overall however, I think this growth stock has a lot of appeal. The stock’s P/E ratio of 31 seems fair to me, given the growth potential.

A game-changing acquisition

Another stock I’d buy right now is Boohoo (LSE: BOO). The leading online fashion retailer now owns a whole portfolio of big brands. These include PrettyLittleThing, Debenhams, NastyGal, and Coast.

Boohoo has generated unbelievable growth over the last five years (revenue growth of nearly 800%) and I think the company’s recent acquisition of Debenhams is going to boost growth further. Debenhams is a well-known brand in the UK and its website gets approximately 300m hits per year. On the Debenhams website there’s now lots of Boohoo products (and other Boohoo brands) for sale.

This stock can be volatile at times. So it’s not suited to risk averse investors. I’m comfortable with the volatility though. With the stock trading on a forward-looking P/E of about 31, I see it as a ‘buy’.

A Warren Buffett-owned stock

Finally, I continue to like Mastercard (NYSE: MA), which is listed in the US. I named this stock as a top ‘reopening’ play back in March and, since then, it has performed well. I think this Warren Buffett-owned stock has the potential to keep rising though.

I like Mastercard for a number of reasons. Firstly, I think it should benefit as the global economy continues to reopen and travel picks up. Last week, the company said it’s started the year with “good momentum,” delivering positive net revenue growth in Q1. It also said it’s encouraged by the return of US spending levels to pre-pandemic trends.

Secondly, the long-term growth potential here is significant. Over the next decade, we’re going to see trillions of transactions shift from cash to credit cards and electronic payments. Mastercard looks well-placed to benefit from this trend.

This stock is not cheap. Currently, the forward-looking P/E ratio is about 48. This adds risk to the investment case. I’m comfortable with this valuation however, as the company is very profitable and has a lot of growth potential.

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.

Edward Sheldon owns shares in Mastercard, Gamma Communications, and Boohoo. The Motley Fool UK owns shares of and has recommended Mastercard. The Motley Fool UK has recommended boohoo group and Gamma Communications. 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.

More on Investing Articles

The flag of the United States of America flying in front of the Capitol building
Investing Articles

Here’s what a FTSE 100 exit could mean for the Shell share price

As the oil major suggests quitting London for New York, Charlie Carman considers what impact such a move could have…

Read more »

Two white male workmen working on site at an oil rig
Investing Articles

Shell hints at UK exit: will the BP share price take a hit?

I’m checking the pulse of the BP share price after UK markets reeled recently at the mere thought of FTSE…

Read more »

Investing Articles

Why I’m confident Tesco shares can provide a reliable income for investors

This FTSE 100 stalwart generated £2bn of surplus cash last year. Roland Head thinks Tesco shares look like a solid…

Read more »

Smart young brown businesswoman working from home on a laptop
Investing Articles

£20,000 in savings? I’d buy 532 shares of this FTSE 100 stock to aim for a £10,100 second income

Stephen Wright thinks an unusually high dividend yield means Unilever shares could be a great opportunity for investors looking to…

Read more »

Investing Articles

Everyone’s talking about AI again! Which FTSE 100 shares can I buy for exposure?

Our writer highlights a number of FTSE 100 stocks that offer different ways of investing in the artificial intelligence revolution.

Read more »

The flag of the United States of America flying in front of the Capitol building
Investing Articles

3 top US dividend stocks for value investors to consider in 2024

I’m searching far and wide to find the best dividend stocks that money can buy. Do the Americans have more…

Read more »

Investing Articles

1 FTSE dividend stock I’d put 100% of my money into for passive income!

If I could invest in just one stock to generate a regular passive income stream, I'd choose this FTSE 100…

Read more »

Young mixed-race woman jumping for joy in a park with confetti falling around her
Investing Articles

Forecasts are down, but I see a bright future for FTSE 100 dividend stocks

Cash forecasts for UK dividend stocks are falling... time to panic! Actually, no. I reckon the future has never looked…

Read more »