2 stocks I’d buy before the Stocks and Shares ISA deadline

I’ve been looking at which companies I should buy before the Stocks and Shares ISA deadline. Here are the two stocks I’d add to in my portfolio.

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The deadline for the Stocks and Shares ISA is fast approaching. That’s why I’m thinking about topping up my allowance to make sure I don’t miss out. I view the ISA as a great way for me to invest for my personal circumstances, so I certainly want to take advantage of it.

Here are two stocks I’d buy before the deadline, and some top-rated stocks and shares ISAs.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

A Stocks and Shares ISA investment

I’d first top up my investment in Games Workshop (LSE: GAW), the tabletop gaming company. The share price has come under pressure recently and is down by 24% over one year. I think this represents a buying opportunity. Indeed, the consensus analyst share price target is £132.10, or 80% above today’s share price of £73.30.

Games Workshop benefits from strong barriers to entry, in my view. The company has developed its games, characters, and storylines over decades, which would be hard for a competitor to copy straight away. It’s also leveraging this intellectual property by selling the rights to use these characters to video games developers. Just last week, Sega published the widely-played third instalment of Total War: Warhammer 3, which received positive reviews from critics.

I see further licensing deals as a key growth driver for Games Workshop. It’s also a very high margin business, too.

However, growth rates have stalled recently. This is due to the cyclicality of Games Workshop’s major tabletop releases. Therefore, sales can spike one year, and then growth appears to slow in the following year. It’s a risk to consider before I buy more shares. In addition, competition cannot be ruled out completely, particularly in the highly competitive video game industry.

But on balance, I’d add Games Workshop shares to my portfolio today.

One more stock I’d buy

I would also add to my position in Volex (LSE: VLX). It’s another share price that has been falling lately, and is down by 20% over one year at time of writing.

The company released its half-year results back in November. Revenue grew by over 44% in the 26 weeks ending 3 October 2021 (HY22), which reflected “high levels of customer demand in all sectors”. However, profit margins came under pressure due to the global supply chain disruptions businesses are facing right now. This is a key risk for the company going forward.

A key growth market for Volex is the expanding electric vehicle industry. The company supplies grid-cords for charging purposes, and sales grew 210% in this division in HY22 compared to the same period last year. I see this being an important vertical for the company in the years ahead.

Volex has also completed two acquisitions recently: Prodamex, and Terminal & Cable. Both companies will expand Volex’s geographic coverage of the North American market. One thing to keep in mind though, is that there’s never a guarantee that an acquisition will work out. Indeed, Volex just recently increased its debt facilities to support further acquisitions. Therefore, acquiring businesses is a key part of its strategy, so it’s important to monitor how they integrate into the Group.

Nevertheless, I’ve been pleased with Volex’s acquisitions up to now. I also see strong growth potential for the company. So, I’d add to my position before the Stocks and Shares ISA deadline.

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.

Dan Appleby owns shares of Games Workshop and Volex. The Motley Fool UK has recommended Games Workshop. 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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