Here are my three best stocks to buy now!

Inflationary pressures and surging energy costs are impacting share prices, so Andrew Woods gives his three best stocks to buy now.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Road trip. Father and son travelling together by car

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

The stock market can often be confusing and fast-moving. Different companies can bring growth to my portfolio depending on the circumstances. Given inflation, rising interest rates and surging energy costs, here are my three best stocks to buy now. Why am I attracted to these firms in particular? Let’s take a closer look.

Biffa

Biffa (LSE:BIFF) is a UK-based waste management business that also incorporates recycling operations.

The big news is that Biffa received a £1.36bn takeover offer yesterday. This equates to around 445p per share. With the stock currently trading at 414p, it could well still be trading at a discount.

In a recent trading update for the first 11 months of the 2022 fiscal year, the company reported that revenue had jumped by around one-third, year on year. With results due on 28 June, I will be watching very closely for improvements in both revenue and profit.

Last November, however, investment bank Peel Hunt downgraded the firm to ‘hold’ because of decreasing footfall in one of Biffa’s recent acquisitions, Company Shop Group. As a potential investor, I hope that this segment begins to see greater interest as the world opens up following the pandemic.

Fresnillo

Fresnillo (LSE:FRES) is a Mexico-based silver mining business. It currently trades at 777p. For 2021, the company reported an increase of around 11% in pre-tax profits. This amounted to just over $600m.

Furthermore, revenue also grew by around 11%. Much of this has been caused by the perceived tightening supply of metals following the war in Ukraine. In addition, market volatility has led investors to seek the ‘safe haven’ of precious metals.

The result is that the value of the silver Fresnillo is producing has surged in value. This translates into a higher share price for the company. Given the protracted nature of the conflict in Ukraine, I think this metal trend will continue.

It is possible, however, that any resurgence in the pandemic could grind mining operations to a halt.

Lloyds

Lloyds (LSE:LLOY) is a UK-based banking business. Its products include loans and mortgages. It currently trades at 45.68p at the time of writing.

The Bank of England has already increased interest rates to 1% and further hikes are expected. 

Interest rates are important because they largely dictate how much a bank like Lloyds can charge for its services. 

Given that rates are probably going to rise in the future, it seems that the company could benefit.

There is also little evidence yet that the housing market is slowing as many housebuilders, like Taylor Wimpey and Persimmon, say that demand is still strong. This could be positive for the bank’s mortgage segment.

There is the risk, however, that inflation and rising energy costs deter potential customers from taking out loans and mortgages. This could be bad news for Lloyds.

Overall, the current market conditions appear to suggest that these three firms may be good purchases at the moment. To that end, I think I will buy shares in all three businesses soon.     

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.

Andrew Woods has no position in any of the shares mentioned. The Motley Fool UK has recommended Fresnillo and Lloyds Banking Group. 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.

More on Investing Articles

Shot of a young Black woman doing some paperwork in a modern office
Investing Articles

Why the boohoo share price soared by almost 14% in November

Is troubled online fashion retailer boohoo beginning a turnaround that may cause the share price to rocket through 2025 and…

Read more »

Young Asian woman holding a cup of takeaway coffee and folders containing paperwork, on her way into the office
Investing Articles

Here’s how saving £5.40 a day could net me £1,971 yearly passive income for life

The price of a cup of coffee seems to have broken the £5 mark. Is it time to put that…

Read more »

Investing Articles

2 top FTSE 100 stocks surging to record highs (hint — not Rolls-Royce)!

Ben McPoland takes a closer look at a pair of high-performing FTSE 100 stocks that continue to enrich long-term shareholders.

Read more »

Investing Articles

A cheap FTSE 100 share to consider buying for the next 10 years!

This FTSE 100 share has pride of place in my portfolio. Here's why I think it could be a top…

Read more »

Snowing on Jubilee Gardens in London at dusk
Investing Articles

Down 44% in 2 months! Is this FTSE 250 green energy pioneer priced too cheaply?

After a sharp tumble in recent months, this FTSE 250 company with a growing order book is almost 90% below…

Read more »

Investing Articles

Investing a £20k Stocks and Shares ISA in this high-yielder might give me a £2,000 annual income

Harvey Jones is now wondering whether to pour his entire Stocks and Shares ISA allowance into a single FTSE 100…

Read more »

Investing Articles

Saving £20k in an ISA? Here’s how I’m aiming to turn that into a stunning £2,035 monthly passive income

Harvey Jones is keen to build a high and rising passive income by investing in a balanced spread of top…

Read more »

Investing Articles

How I’ll aim to turn an empty ISA into a £100k nest egg buying cheap shares in 2025

Christopher Ruane explains how he thinks taking a long-term approach to buying cheap shares and holding them could help him…

Read more »