I regularly review the FTSE 100 for the best shares to buy now. Avast (LSEAVST) could be one such stock and I am considering it for my portfolio. Here’s why.
FTSE 100 pick
Avast is a specialist in IT cyber security. It is renowned for its free antivirus software for domestic home computer users. It also offers paid bespoke and much more complex security solutions for home users and business users. Avast adopts the latest in cloud technologies and real time data to assist its hundreds of millions of users worldwide.
It is worth noting that Avast only floated on the London Stock Exchange in 2018. I cannot recall many of my best shares to buy now having such a limited time on the LSE. As I write, shares are trading for 586p per share. In the past six months, Avast has seen its share price increase by nearly 40% to current levels from 420p per share in March. It is currently trading at close to all-time highs and I believe this upward trajectory could continue.
3 reasons why
I have pinpointed three reasons why I like Avast as one of my best shares to buy now from the FTSE 100:
- The founders of Avast are still involved in the business to this day. Current CEO Ondrej Vlcek has been with the 30-year-old firm for more than 25 years. He also owns shares. I particularly like when insiders buy shares as it is a sign of confidence by those who know the business best. In total, 30% of the stock is owned by the founders.
- Performance has remained consistent and growth year-on-year is pleasing to see for a potential investor such as myself. I see that revenue and profit have increased year-on-year since 2017 including 2020, which was a difficult year for all due to the pandemic. This growth pattern and trajectory could continue based on plans in place to increase presence and offering in my opinion. I do understand that past performance is not a guarantee of the future.
- Based on AVST’s current price and a price-to-earnings ratio of just less than 30, the current share price represents value to me. The price has consistently increased since it joined the FTSE 100. Avast also offers a dividend which would help me make a passive income.
The best shares to buy now have risks too
The primary risk associated with Avast for me is its competition and place in a cut-throat market. Avast is a small player in a lucrative market dominated by larger, better known firms. Some that spring to mind are Norton and Kaspersky. These rivals’ brand recognition and size may affect Avast’s future growth plans and in turn, its financials.
Overall, I believe Avast is one of the best shares for me to buy now on the FTSE 100. It has a good track record of performance and growth. I believe at its current price it could be a good opportunity to add shares to my portfolio at a fair price and make me a small passive income. I would consider adding shares.
