3 shares to buy in the stock market carnage

With so much uncertainty in the world today, stocks are being hit hard. Here, Edward Sheldon highlights three shares he’d buy in the meltdown.

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It’s a tough time to be a stock market investor right now. With the Russia-Ukraine conflict, rising interest rates, and sky-high energy prices all creating uncertainty, share prices are falling across the board.

My strategy in situations like this is always the same. I stay calm, and look for high-quality stocks that have been sold-off unfairly. With that in mind, here are three shares I’d buy in the current stock market carnage.

This UK stock looks oversold

One FTSE 100 stock that strikes me as a ‘buy’ right now is Rightmove (LSE: RMV), which owns the UK’s largest property website. Its share price has fallen from around 800p to near 630p this year, and I think this weakness has created a fantastic buying opportunity.

I can’t see Rightmove being impacted that much by what’s going on in the world today. As the owner of a UK property website, its fate is largely tied to the health of the property market. Of course, if rising interest rates were to cause a recession, or a huge slowdown in the property market, RMV could suffer.

However, I think the chances of this happening are relatively low. It’s worth noting that full-year 2021 results, posted today, were strong. And City analysts expect healthy growth in 2022.

After the recent share price weakness, RMV has a forward-looking P/E ratio of 27. I see that as an attractive valuation, given the company’s brand power and growth track record. 

Incredible growth

Turning to the US market, I really like the look of Alphabet (NASDAQ: GOOG). Earlier this month, the owner of Google and YouTube saw its shares trading near $3,000. However today, they’re near $2,650 and I see a lot of value at that level.

Alphabet’s recent Q4 2021 results were phenomenal. For the period, the group generated revenue growth of 32% year-on-year, along with a 38% increase in earnings per share.

Looking ahead, I expect Alphabet to get much bigger. This company has a lot of growth drivers, and I don’t think it’s likely to be impacted that much by the current geopolitical crisis.

The biggest risk here, to my mind, is regulatory intervention. In the years ahead, Alphabet could be fined, or even broken up by regulators. I’m comfortable with this risk however. At its current valuation (the P/E ratio is in the low 20s), I see GOOG as a strong ‘buy’.

I expect this stock to bounce back

Finally, in the UK small-cap space, I now see a lot of appeal in Cerillion (LSE: CER). It’s an under-the-radar software company that provides billing, charging, and customer relationship management solutions. At the start of the year, its share price was above 900p. Now it’s near 650p.

Cerillion has generated strong growth in recent years and in its last trading update it was very confident in relation to its growth prospects for 2022.

Prospects for ongoing growth remain very strong. With a record back-order book and strong new business pipeline, we remain confident of continued momentum over the new financial year,” said CEO Louis Hall. So I believe the recent share price fall here is unjustified.

I’ll point out that if technology stocks were to keep falling, Cerillion’s share price could fall further. However, with the stock now trading on a P/E ratio of around 22, I think the long-term risk/reward skew here is attractive.

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.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Edward Sheldon owns shares in Alphabet (C shares), Cerillion, and Rightmove. The Motley Fool UK has recommended Alphabet (A shares), Alphabet (C shares), and Rightmove. 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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