Today is a great time to look for shares to buy like these

Here are four shares to buy right now I think they’re backed by some of the best businesses on the London stock market.

Cheerful young businesspeople with laptop working in office

Image source: Getty Images

I’m always hunting for shares to buy and hold for the long haul. But like the great investor and billionaire Warren Buffett, my buying criteria list is quite demanding. So many companies will not make it into my portfolio.

I learnt from Buffett to look for exceptional businesses. He calls his “wonderful” businesses and he considers himself to be a business picker and not a stock picker.

Commitment

And that’s an important distinction that reveals his mindset. When he commits to a company by buying some of its shares, he considers himself to be a part-owner of that enterprise. And he holds on to his shares with the same tenacity as if he owned a business outright. Through thick and thin, in good times and in bad. 

But such a commitment requires exacting standards in the first place. Buffett won’t buy just any old stock for a long-term investment. He’s known for searching for businesses with an enduring competitive advantage. And that often shows up in a company’s financial and trading record.

For example, a high-quality business will likely be generating better profit margins than many other enterprises. And it will often post better percentage returns against equity and invested capital.

My own strategy aims to follow Buffett’s techniques. Therefore, I’m also searching for a consistent record of multi-year trading with incremental increases in revenue, earnings and cash flow. And looking ahead, I want that pattern of growth to continue into the future, just like Buffett does.

Valuation

The final piece of the jigsaw puzzle is to focus on valuation. Buffett often looks for a fair price rather than a bargain price. And that makes sense because lower-quality businesses often attract bargain prices.

We could be seeing decent conditions in which to invest right now. There’s been a long period of falling share prices and a lot of negative economic and geopolitical news. And that’s just the type of thing that can drive valuations lower.

I’ve got several stocks on my watch list. Such as fast-moving consumer goods company Unilever and information technology infrastructure business Computacenter. I also like the look of soft drinks maker Britvic. And global luxury goods manufacturer, retailer and wholesaler Burberry.

Diversification

These stocks and others similar are likely to end up in my long-term diversified portfolio soon. And if there’s a further lurch down in the markets, I’ll almost certainly be pulling the ‘buy’ trigger then. But even if the stock market bottoms near current levels, I think I’m seeing good value in these stocks now. So I’ll start picking them off as soon as spare cash becomes available for me.

Of course, there are no guarantees of a positive long-term investment outcome. And that’s even if I aim to copy Buffett’s methods. But I’m prepared to embrace the risks of share ownership with companies such as these. And I’m optimistic that in 10 years I’ll have been rewarded for my actions now.

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 considered so you should consider taking independent financial advice.

Kevin Godbold has no position in any of the shares mentioned. The Motley Fool UK has recommended Britvic, Burberry, and Unilever. 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

A pastel colored growing graph with rising rocket.
Investing Articles

3 top shares for the ongoing stock market recovery

Although messy, I think the stock market recovery is beginning and that's why I'm now buying shares such as these.

Read more »

Mature people enjoying time together during road trip
Investing Articles

5 UK shares I bought for income of 9.5% a year

We recently bought these five cheap UK shares for their generous dividend yields. These cash payouts range from nearly 7%…

Read more »

Bearded man writing on notepad in front of computer
Investing Articles

Is there still time to buy Scottish Mortgage shares?

The Scottish Mortgage share price has risen strongly in recent weeks. Should I pile into the FTSE 100 momentum stock…

Read more »

Smiling white woman holding iPhone with Airpods in ear
Investing Articles

Why I’d start buying shares with £250 today not £20,000 in future!

Is it worth waiting to start buying shares until one has more money to invest? Our writer doesn't think so…

Read more »

Playful senior couple in aprons dancing and smiling while preparing healthy dinner at home
Investing Articles

I’ve bought Diageo shares to boost my long-term passive income!

I plan to hold on to my Diageo shares well into retirement. Here's why I think it's a top stock…

Read more »

New virtual money concept, Gold Bitcoins
Investing Articles

Down 61%, are Argo Blockchain shares worth buying?

Argo Blockchain shares have tumbled in value. As a shareholder, Christopher Ruane considers what might come next for the business…

Read more »

Smiling young man sitting in cafe and checking messages, with his laptop in front of him.
Investing Articles

3 UK dividend stocks with yields over 10%

These dividend stocks are the highest yielders on the UK market, says Roland Head. But how safe are these generous…

Read more »

Couple relaxing on a beach in front of a sunset
Investing Articles

I’d start buying shares for passive income with this pair

Our writer is looking to earn passive income via investing, and here are two leading stocks he might buy.

Read more »