Best stocks to buy now: 2 FTSE 100 picks I’d buy with £2K

Jabran Khan details two FTSE 100 picks from his best stocks to buy now list that he would invest in if he had £2K, and explains why.

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If I had £2,000 to invest in picks from my best stocks to buy now list, here are two FTSE 100 shares I would consider for my portfolio.

Housing market on the up

Rightmove (LSE:RMV) is the UK’s largest property portal and the housing market in the UK is currently thriving.

There’s a lot I like about Rightmove. Firstly, it’s the top property website visited in the UK, according to data published by Similarweb.com. This means estate agents and consumers alike flock to Rightmove.co.uk. This traffic offers it the ability to set its own pricing and in effect charge agents almost what it wants.

Rightmove has low expenses and with its unique position in the market, is able to offer some of the highest profit margins in the FTSE 100. In 2019, it reported an operating profit margin of 74%. In 2020, this dropped by 66% due to the pandemic.

2021 is projected to be a better year than the very successful 2019 for Rightmove. Projections are not guaranteed, but earnings growth of 62% and profits of over £175m are forecast. 

I believe if it can maintain its competitive advantage, keep costs low and the pandemic does not rear its head once more, it will be one of the best stocks to buy now for the long term for my portfolio. 

Back in the FTSE 100

ITV (LSE:ITV) has returned to blue-chip glory in the FTSE 100 and is also on my best stocks to buy now list as I believe it’s revival will continue. 

It has shown signs of life recently despite a few tough years. It has anticipated that the resumption of major television spectacles such as reality shows like Love Island and the UEFA Euro 2020 football competition will bring in millions of viewers it may have lost during the pandemic period. In addition to this, it anticipates a good rebound in advertising revenues. Q1 was challenging from a revenue perspective but Q2 is already forecast to increase 60-75%. 

ITV has been slashing costs too, which I like. In 2020 it reduced costs by £116m which was almost double its target of £60m. Cost-cutting on this scale is expected to improve ITV’s bottom line. I expect ITV’s upward share price trajectory to continue too and its performance to get better as time goes by, making it a good addition to my portfolio.

These stocks have risks

Rightmove faces two main issues in my opinion. Firstly, it faces fierce competition attempting to eat up its market share. In addition to this, if the pandemic continues to cause restrictions, Rightmove could see a repeat of 2020 when performance was poor due to a weak housing market.

ITV also has its challenges. The increasing presence of other media outlets that are attempting to suck up content and viewers across the world could affect a more traditional platform like ITV. On-demand streaming is also an ongoing threat, despite its own ITV Hub offering. The pandemic may continue to affect certain television spectacles if restrictions come into force once more too.

Yet overall, I believe these two opportunities are some of the best stocks to buy now on the FTSE 100. I think they could make good long-term additions to my portfolio.

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 considered so you should consider taking independent financial advice.

Jabran Khan has no position in any shares mentioned. The Motley Fool UK has recommended ITV and Rightmove. 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.

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