2 of the best FTSE 100 shares to buy in August

Profits are growing at these two FTSE 100 firms. Harshil Patel looks at why he’d buy both this August.

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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.

I’m looking at several FTSE 100 shares that seem particularly interesting right now. There seems to be no shortage of companies reporting reassuring results and trading updates.

The relaxing of pandemic restrictions is causing a bounce-back for several companies and industries. Across the retail, leisure, industrial and housing sectors, I’ve noticed many positive updates in recent weeks and months.

When I’m searching for the best shares to buy, I tend to look for companies that have recently reported such positive figures. After all, quite often, buoyant trading trends can continue for some time. 

Moving in the right direction

For instance, online property portal Rightmove (LSE: RMV) recently highlighted excellent half-year trading. Profits nearly doubled from the same period last year and were up 6% on 2019.

It looks like the pandemic and lockdowns nudged people to move home, or at least look to think about it. Site visits reached 1.4bn, up 56% vs last year.

Rightmove makes a big chunk of its earnings from allowing agencies to advertise properties on its platform. A key operational metric for it is its Average Revenue Per Advertiser. This was up 63% vs last year and up 8% from 2019.

A FTSE 100 technology firm

These are excellent figures, in my opinion. The FTSE 100 technology firm also expects the positive momentum to continue in the second half of the year. It continues to release innovative features on the platform too. These could help cement its position as the platform of choice for home-hunters.

That said, Rightmove operates in a fast-moving industry. Failure to innovate fast enough could reduce its ability to grow. It’s also almost fully reliant on the UK housing market. Any trend shifts could have a material impact on its business.

But overall, I like how it’s going and am keen to buy some shares for my Stocks and Shares ISA this August.

Glass half full

Another FTSE 100 firm that reported rising profits is Diageo (LSE: DGE). It’s seeing strong growth in North America, its largest market. With Covid-19 restrictions relaxing, I’m not surprised the drinks maker is busy. It looks like more social activities are keeping the supermarket drinks aisles busy, as well as bars and restaurants. And that’s keeping Diageo’s taps flowing.

The global drinks giant owns many well-known brands including Johnnie Walker, Baileys and Guinness. The strength of its brands helped Diageo achieve sales growth across all regions in its latest period. Organic net sales grew by 16%. Impressively, it even managed to grow market share.

CEO Ivan Menezes remains “optimistic about the growth prospects”. That said, challenges remain. The company expects some near-term volatility in some of its markets.

Many more bars and clubs have now opened in some countries but not all. Some regions remain a challenge and Covid-19 variants could keep the shadow of uncertainty affecting hospitality-related companies like Diageo.

All things considered, I am optimistic that the strength of its brands can endure such external challenges, however. Diageo is a strong, profitable and cash-generative FTSE 100 firm that I’d consider buying for my long-term shares 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.

Harshil Patel has no position in any of the shares mentioned. The Motley Fool UK has recommended Diageo 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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