3 FTSE 100 stocks I’d buy before July

Paul Summers picks out three FTSE 100 stock he’d be comfortable buying today (and ahead of their trading updates next month).

| More on:
Scene depicting the City of London, home of the FTSE 100

Image source: Getty Images.

With markets struggling to find direction in recent weeks, I’m more committed than ever to reading up on the latest news and updates from UK companies for clues as to what the rest of 2022 might hold. Three of the biggest all report in July.

Persimmon

Housebuilder Persimmon (LSE: PSN) is down to issue a trading update on 7 July. Having tumbled a third in value in 2022 alone, investors will naturally be looking for some reassuring comments from CEO Dean Finch.

I’m inclined to think that while trading will be just fine, the growing likelihood of a recession hitting the UK could play on investors’ minds. After all, this could mean a hitherto buoyant housing market will start to slow. As such, there’s certainly no guarantee Persimmon shares won’t slip lower in the months ahead.

Nevertheless, there’s still a lot to like here. Having been hammered in the market sell-off, the stock now changes hands for just seven times earnings. There’s also that monster, inflation-beating 12.5% forecast dividend yield.

Although I’ve been critical of the firm in the past (mostly to do with its overly generous remuneration policy for a departing CEO), I’d feel comfortable buying a slice today.

Experian

Another FTSE 100 stock reporting next month is credit firm Experian (LSE: EXPN). Like Persimmon, the company has seen its value decline by roughly a third in 2022, so far.

This seems overly harsh. Experian is a quality firm possessing solid growth credentials, a competitive position and delivering high margins. Encouragingly, veteran stock-picker Nick Train remains a big shareholder.

What are the downsides to the investment case? Well, the valuation — a forward price-to-earnings (P/E) ratio of 21 at the time of writing — doesn’t exactly scream ‘bargain’. This is especially if interest rates continue to rise and lending demand falls. This could have an adverse effect on Experian’s earnings, at least temporarily. We might find out whether this is already the case when a Q1 trading update arrives on 14 July.

For someone investing for the long term however, I’d already be willing to buy.

Unilever

The third of the FTSE 100 stocks I’ll be following next month is consumer goods giant Unilever (LSE: ULVR). Interim results are due on 26 July.

I think it’s fair to say sentiment around this company has been fairly low for a while now. In addition to concerns over growth, the company has also faced criticism for focusing on the wrong things. Most notably, star UK fund manager Terry Smith suggested Unilever was getting a little too obsessed with boosting its ESG credentials. As he memorably put it, “a company which feels it has to define the purpose of Hellmann’s mayonnaise has in our view clearly lost the plot.”

Despite this, Smith remains a fan. As do I. A bursting portfolio of brands that most people wouldn’t consider switching from should help it through these tricky times. A mere 6% fall in the share price in 2022 goes some way to highlighting its defensive quality.

A P/E of less than 16 is far lower than the five-year average of 20 too. I’d have no hesitation buying 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.

Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended Experian 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

Mixed-race female couple enjoying themselves on a walk
Investing Articles

UK shares: 1 burgeoning tech stock to buy for returns and long-term growth!

Jabran Khan is looking for the best UK shares to buy for his holdings that provide excellent returns and growth…

Read more »

Black father holding daughter in a field of cows
Investing Articles

2 FTSE 100 shares I’d buy for lifelong passive income!

These FTSE 100 shares have proved to be excellent dividend stocks for many years. Here's why I think they'll continue…

Read more »

Young brown woman delighted with what she sees on her screen
Investing Articles

1 cheap penny stock that boosts passive income and has great growth prospects!

This Fool likes this penny stock that currently looks good value for money, has an enticing dividend yield, and growth…

Read more »

Sun setting over a traditional British neighbourhood.
Investing Articles

Will the Taylor Wimpey share price rebound soon?

The Taylor Wimpey share price has jumped 10% since it bottomed last month. But will it continue its rally and…

Read more »

Middle-aged white man wearing glasses, staring into space over the top of his laptop in a coffee shop
Investing Articles

Should I buy this growth stock at £10?

The ASOS share price has tumbled to its lowest price in the last 10 years. Surely at £10 per share,…

Read more »

Middle-aged white man pulling an aggrieved face while looking at a screen
Investing Articles

Is the bear market in stocks over? I fear not!

After the worst first-half bear market in 52 years, US stocks have rebounded in the past month. But what should…

Read more »

Happy male couple looking at a laptop screen together
Investing Articles

Is this FTSE 250 stock one of the best to buy for consistent growth and returns?

Jabran Khan takes a look at whether this FTSE 250 tech stock could be a good addition to his portfolio…

Read more »

Girl and father putting coin into piggy bank, sitting on sofa at home
Investing Articles

Here’s why I’d buy Legal & General shares to bag 7.5% dividends today

Legal & General shares are picking up, as the company reaches the halfway stage in its five-year cash and dividend…

Read more »