It’s a new tax year, and that means I’m once again on the prowl for the best shares to buy now for my Stocks and Shares ISA. With the stock market having suffered a bit of a tumble these past few months, plenty of fantastic businesses are on sale right now. But here are my top three stock picks I’m considering for my portfolio.
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.
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Music to my ears
Let’s kick off my best-shares-to-buy-now list with an under-the-radar stock operating within the world of music. Focusrite (LSE:TUNE) is a global audio product manufacturer. It designs high-quality audio equipment within the music industry, both for studios and live events, under numerous brands, including Novation, AMPIFY, and Sequential.
Since the start of the year, the shares have dropped by nearly 20%, despite early trading results being promising. Management expects revenue for the first half of the year to land at around £91m. That’s actually down from £95.3m a year ago. But considering the operating environment with ongoing supply challenges for electronic equipment, seeing an almost flat comparative performance is quite encouraging.
If the group misses this target, it could open the door to further volatility. However, since these hurdles appear to only be a short-term problem, the drop in the stock looks like a potential bargain. That’s why I think they could be an excellent addition to my Stocks and Shares ISA.
Domino’s Pizza Group (LSE:DOM) hasn’t had the greatest start to the year, falling by 17% over the last three months. But those days may soon be over. For several years, management has had to deal with a minor conflict with its franchisees over certain aspects of their agreements. But that was under old leadership. And the new administration seems to have finally fixed this multi-year problem.
With more aggressive advertising budgets, new technological innovations, and additional customer collection options, the business seems to be on track to significantly expand its top line, taking profit margins with it.
That certainly sounds like the best shares to buy now, in my opinion. But there are, of course, risks to this new strategy. With the company relying more heavily on digital systems, any cyber security breach could severely disrupt operations, creating opportunities for competitors. Nonetheless, the potential returns make this risk worth taking, in my mind. And that’s why I’m considering this business for my Stocks and Shares ISA today.
After the pandemic created a jump in demand for home improvement, Howden Joinery Group (LSE:HWDN) came onto my radar. The firm is a vertically integrated kitchen and joinery product manufacturer for the home construction sector.
That may not sound like the snazziest stock out there. But with a track record of delivering an average 11% annual revenue growth with a degree of consistency, now could be the perfect time to add it to my Stocks and Shares ISA.
Supply chain disruptions combined with rising labour costs could significantly impact profit margins. And with larger fish in the pond, passing on the cost to customers may prove difficult if they can simply switch to a cheaper competitor. Yet, this impact has yet to materialise, which is why it’s on my best shares to buy now list.