With its share price soaring, is this one of the best shares to buy?

This Fool delves deeper into a stock who’s share price is soaring. Could it be one of the best shares to buy now for his portfolio?

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With the Renewi (LSE:RWI) share price soaring in recent months, could it be one of the best shares to buy for my portfolio?

Recycling firm

Renewi is a waste processing business with operations in North America and throughout Europe. It is a recycling business that processes waste and uses its facilities and operations to convert that waste into usable materials. It then sells this material to firms to produce consumer goods such as vacuums and bicycles and more. Renewi states it processes approximately 14m tonnes of waste a year.

When I look for the best shares to buy now I often consider the type of investment model a stock fits in. For example, there has been a rise in ESG and ethical investing. Investor sentiment has risen in recent times towards these types of stock. I believe Renewi’s share price has increased partly due to this. Renewi has attempted to showcase its corporate social responsibility, which has boosted investor sentiment. A prime example of this is its introduction of green bonds for retail investors. 

Share price rise and performance

As I write, shares are trading for 758p. This time last year, shares were trading for 222p, which is an impressive 240% return in 12 months alone. I often see my best shares to buy now providing positive returns in a similar time period.

Aside from the investor sentiment towards businesses such as Renewi, what has caused this increase in share price? Well, Renewi has provided some good updates recently, which has helped. Its latest half-year report released last week for the six months ended 30 September 2021 was brief, but positive overall.

Renewi reported that it would be upgrading its full-year expectations in the first line of the update! It also said there were increased volumes of materials it recycled, improved recyclate prices, and continued cost management, which has supplemented better than expected trading. Revenue compared to the same period last year was 10% higher and 7% higher than the pre-pandemic trading year.

The best shares to buy now have risks

I do note some credible risks with Renewi, however. Firstly, it there’s a lack of specific data and numbers in its update. I think these would go a long way in showing progress and tangible information for potential investors such as myself.

Next, despite good progress on many fronts, it does note a lack of progress and issues in some of its divisions that could hinder progress and financials. For example, its Mineralz & Water division has experienced issues. There have been issues with fermentation and its key markets such as construction have been hampered by Covid-19. This shows not everything it does is working and that Covid-19 is still an ever present threat for Renewi.

Would I buy Renewi shares for my portfolio? No, is the short answer. I want to know a bit more and keep an eye on developments for now. It could end up being one of my best shares to buy in time with the rise in ESG investing and its progress. For now, I will look at other investments for my portfolio I consider a bit safer with more information to hand to make a decision.

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 assessed. Consider taking independent financial advice.

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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