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Here is one 1 of my best shares to buy now

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SThree (LSE:STEM) is one of my best shares to buy now, and I believe it could make a good addition to my portfolio. Should I buy shares at current levels?

Recruitment drive

SThree is an international firm providing permanent and contract specialist staffing services for information and communication technology, banking and finance, energy, engineering, and the life science sectors. The ticker STEM derives from its focus on science, technology, engineering, and mathematics.

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One of the primary reasons I class SThree as one of my best shares to buy now is diversification. In my opinion it possesses this on two fronts. Firstly, it operates in a diverse range of industries and is able to place staff in a lot of different sectors, some of which are booming. A prime example is technology. Approximately half of its business comes from tech. Life sciences and engineering follow closely with banking and finance accounting for less than 10% of its business.

In addition to the sectors in which SThree operates, it is diverse in its locations. In recent years it has made massive investments to bolster its global footprint.

Share price and performance

As I write, I can buy shares in SThree for 498p per share. Rewind to this time last year and shares were trading for approximately 100% less at 247p per share. This is a healthy share price rise which reflects the company’s recovery since the pandemic slowed its progress. In fact, SThree’s share price has surpassed pre-crash highs of 386p per share too.

Another reason I rate SThree as one of my best shares to buy now is its consistent performance. Last month, on 19 July, it released its half-year trading report which made for excellent reading in my opinion.

SThree pointed towards better market conditions and a rise in demand for STEM skills. Results confirmed an increase on all fronts compared to the same period last year. The highlights for me were an increase in operating profit increasing by 101% and profit before tax increasing by 110%. In addition to this, it increased net cash by 53% compared to the same period last year. Finally, SThree confirmed that FY21 results would be ahead of expectations based on such a fruitful first half year.

SThree also has an excellent historic track record of increasing revenue and profit before the pandemic affected this year-on-year upward trend. As a savvy investor, I fully understand that past performance is not a guarantee of the future but I prefer companies with a good track record.

Even the best shares to buy now have risks

My first issue with SThree is that it is trading at all-time highs. This means that any bad news or negative market reaction could cause a sharp share price drop. Second, SThree was badly affected by the pandemic. If there were to be further restrictions based on the rising number of Covid-19 cases, there could be a repeat of this.

Overall I would by SThree shares for my portfolio at current levels. I do believe it can continue to grow. SThree’s track record and growth to date convince me it could be a good addition to my portfolio despite the risks involved. It is high on my best shares to buy now list.

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Jabran Khan has no position in any of the shares mentioned. 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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