2 Stocks and Shares ISA buys

Rupert Hargreaves takes a look at two companies he’d buy for his Stocks and Shares ISA, considering their growth potential.

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I am always on the lookout for new investments to add to my Stocks and Shares ISA. Here are two companies I believe could produce the sort of returns I want to see from an investment. 

Investments for a Stocks and Shares ISA

The first on my list is Liontrust Asset Management (LSE: LIO). The asset management industry is currently under fire from all angles.

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This is because low-cost passive funds are attracting investors in large numbers, while many investors are rebelling against high fees from financial advisors. Low- or no-cost platforms have been taking the sector by storm. 

Against this backdrop, Liontrust’s performance stands out. By focusing on sustainable investments, it’s been able to stand out in a competitive market. During the three months to the end of June, investors allocated £1bn to the group’s funds. Assets under administration at the end of the quarter were £33.6bn, an increase of 8.5%. 

Liontrust’s funds have won a string of awards over the past 12 months. What’s more, the asset manager was voted ‘Group of the Year’ at Incisive Media’s prestigious Fund Manager of the Year Awards.

With so many other options available, asset managers need something to stand out, and Liontrust’s awards help the business do just that. Which is why I’d buy it for my Stocks and Shares ISA today.

As long as it keeps doing what it’s doing, I reckon the firm can continue to attract assets. This should produce higher management fees, although it will need to stay on its toes. With so many challengers out there, I can’t take Liontrust’s growth for granted. 

Critical components 

Trifast (LSE: TRI) literally supplies the nuts and bolts for the engineering and construction industries. As such, I think the stock could be a great addition to my Stocks and Shares ISA as an economic recovery play. 

Last year, the group reported a 6% decline in revenues year-on-year, which is impressive considering the environment. 

Going forward, management has its sights firmly set on growth. It’s focusing on “value-enhancing acquisitions” as it aspires to become a “much bigger company.” Even after the challenges of the past two years, Trifast’s management believes this is the “most dynamic time for Trifast in more than a decade.

I’m conscious that just because management has ambitions to grow, it doesn’t necessarily mean the company will be able to execute on these targets. However, I think the combination of the economic recovery and Trifast’s cash balance of £13.m will help support the firm’s ambitions. 

Some challenges that may slow growth include higher costs and competition, both of which could hurt profit margins and growth. 

Despite these risks, I think the company has multiple attractive qualities as a Stocks and Shares ISA buy. 

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Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK 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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