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Best shares to buy: 3 stocks I’d grab today

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Private investor buying UK shares at home
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Today’s full-year report from luxury watch retailer Watches of Switzerland (LSE: WOSG) trumpets a “strong” performance. And the company saw “record” revenue and profitability for the year to 2 May.

Alongside the results statement, WOSG also issued its Long-Range Plan. And the document sets out the directors’ ambitions for the next five years and how the company intends to achieve them.

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Why I think WOSG is one of the best shares to buy now

The plan concludes that expansion in the US and the EU will combine with organic progress in the UK to drive growth. Meanwhile, today’s results show 67% of revenue came from the UK and 33% from the US in the year to 2 May.

The trading figures are moving in the right direction. Constant currency revenue increased by just over 13% compared to the prior year. And adjusted earnings per share shot up by a little over 43%. The figure for net debt reduced by just over 66% to just under £44m.

Chief executive Brian Duffy said the business has good momentum and “underpins” his confidence for the year ahead. The strategy involves ongoing investment in stores, projects and acquisitions. And the firm’s ambition is to become “the clear leader in the market.” Duffy is “confident” about the company’s plans to build a long-term record of sustained growth to “capitalise on the significant growth opportunities available.”

City analysts expect earnings to increase by around 30% in the current trading year. But, of course, they could be over-optimistic. And there’s no guarantee the directors’ growth plan will result in the increased earnings they expect. Much depends on the future dynamics and demand levels of the retail market for luxury watches.

But with the share price near 838p, the forward-looking earnings multiple is just below 27. That’s a growth valuation, for sure. But I’d be inclined to embrace it and hold the stock as the five-year strategy unfolds, despite the risks.

Quality and business momentum

However, WOSG isn’t the only stock I’d grab today. I also like the impressive quality indicators being produced by IMI. The business makes valves actuators and other components aimed at controlling the movement of fluids. And City analysts have pencilled in an almost 12% increase in earnings for 2022.

Naturally, it’s possible for the company to miss estimates and the share price may fall and cause me to lose money. However, the outlook’s positive. And with the share price near 1,706p, I’d be inclined to embrace the forward-looking earnings multiple near 18 and buy some shares to hold for the long term.

Another I’d pick for my diversified portfolio is luxury wallpaper maker Sanderson Design. The company carries net cash on its balance sheet. And City analysts forecast a thumping bounce-back in earnings during the current trading year to January 2022. Then they expect an almost 20% advance next year.

I think the company looks well-placed to benefit from a protracted recovery in the general economy. So I’d carry the risk of those analysts being wrong and the possibility of another economic decline. I’d buy the stock now. And with the share price near 169p, the forward-looking earnings multiple for the trading year to January 2023 is around 13.

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Kevin Godbold has no position in any of the shares mentioned. The Motley Fool UK has recommended IMI. 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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