2 ‘no-brainer’ shares to buy before the market rebounds

A stock market rebound can occur at any time. In anticipation, our writer considers which shares to buy for his Stocks and Shares ISA.

| More on:
Happy young plus size woman sitting at kitchen table and watching tv series on tablet computer

Image source: Getty Images

Many global stock markets have experienced quite the wobble this year. That’s why I’m looking for the best shares to buy before the market rebounds.

Now, it’s still uncertain when the stock market will fully recover. High inflation is the biggest challenge facing the world’s central banks. And their policy to tackle rising prices could cause a deeper recession.

But I’m looking further ahead. As a long-term investor, I want to know which shares to buy and hold that could thrive over the coming years.

Top shares to buy

At the top of my list is the most valuable company in the world, Apple (NASDAQ:AAPL). This is a high-quality business.

Even renowned investor Warren Buffett likes these shares. That’s despite having avoided technology stocks for many years.

So much so, more than 40% of Buffett’s Berkshire Hathaway (NYSE:BRK-B) portfolio is now composed of Apple shares. That is quite some conviction.

And I can see why. It has one of the strongest and most recognisable brands in the world. Apple also runs a closed ecosystem, making it very difficult to switch to competitors. That results in customers that remain for years, providing Apple with significant repeat business.

Buffett once said, “in business, I look for economic castles protected by unbreachable moats”. The moat he refers to is a solid competitive advantage. And for Apple, that’s brand loyalty, in my opinion.

A word of caution, however. Rising energy and food costs might lead to tighter pockets for many consumers. And some might think twice before upgrading their phones and laptops, or some customers might delay their purchases.

Overall though, this is a cash-heavy and resilient business. I already own some of these shares but I’d be more than happy to buy some again before the market rebounds.

From apple to bread

When looking for the best shares to buy, I like seeing businesses that have a strong customer proposition. Whereas Apple targets the premium end of smartphones, my next share targets the value end of baked goods.

I speak of England-based bakery chain Greggs (LSE:GRG). Like Apple, it has built a strong brand throughout the country, even gaining a cult-like following from parts.

Recent sales have been encouraging. For the six months to 2 July, pretax profit was higher than the year before. That’s despite higher operating costs.

Rising energy, staffing, and commodity prices has put pressure on many businesses. And Greggs is no exception.

That said, it was able to raise prices accordingly without seeing a drop-off in demand. That’s exactly the type of pricing power that I like to see.

As incomes get squeezed later in the year, many businesses could see a fall in demand. But Greggs offers low-value products. The average spend in a store is just £4, and I feel that customers are unlikely to alter their spending behaviour if Greggs needs to add a few more pence to their sausage rolls.

Greggs has a strong balance sheet and plenty of cash flow. It’s also planning to open around 150 new shops this year. Given its resilience, I reckon these are exactly the type of shares I’d buy for my Stocks and Shares ISA.

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.

Harshil Patel has positions in Apple. The Motley Fool UK has recommended Apple. 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 »