With the annual deadline for putting funds in an ISA, like many investors my mind is turning to my portfolio. Are there shares to buy now that could make attractive long-term holdings? I think there are – and here are three I would consider for my Stocks and Shares ISA.
As a buy-and-hold investor, I am attracted to the enduring potential of a company like consumer goods giant Unilever (LSE: ULVR). Over two billion customers use its products in a typical day. Owning premium brands such as Lynx, Dove and Domestos helps give it pricing power. That can offset the risk to profits posed by inflation, which is currently a concern for the company. So in terms of the business, I see Unilever as the sort of share I could tuck away in my ISA for its long-term potential. It seems unlikely to offer explosive growth, but hopefully over time it can show attractive growth overall.
After recent falls in the Unilever share price, I see it as an appealing choice for me before the ISA deadline. It currently yields 4.4%. I also hope the deflated share price could open up opportunities for capital gains.
I also see now as a good time to add more Boohoo (LSE: BOO) stock to my ISA.
The share price has soared more than 40% in under a fortnight. Despite that, I still think that buying it today could hopefully offer me attractive returns. After all, the share price remains 70% lower than a year ago.
The concerns that have pushed Boohoo shares down include the company’s reputation and cost price inflation. It is addressing the reputational concerns. I do not expect them to be a long-term problem for the company in the way they have been. Inflation concerns me more. With a low-cost model, its profits can suffer from inflation both in materials and wages. Its share price fall has come as the company warned on profits.
But the consistently profitable firm continues to grow revenues. Its shares are priced as if it is a turnaround case. But I see it as a company going through a tough patch that is an inevitable occasional occurrence due to its business model. Buying these shares before the ISA deadline could help me benefit if my thinking is correct and the share price rises again in future.
An income share
Many investors use their ISAs to generate passive income. I am one of them. An income share I have bought this month, before the ISA deadline, is investment manager M&G (LSE: MNG).
The economics of this business are fairly straightforward, making it easy for me to understand it. The sums involved are large, so even a small commission can help M&G generate substantial profits. One concern is clients withdrawing funds, hurting revenues and profits. But the company announced this month that last year saw a net inflow of such funds. The company also announced another big dividend, meaning the shares currently offer an annual yield of 8.6%. I have tucked this FTSE 100 dividend powerhouse away before next month’s ISA deadline and hope to earn passive income from it for years to come.