With technology changing the way the world works, I believe some of the best shares to buy now are linked to the rise of tech. One stock I am interested in is Future Plc (LSE:FUTR). Should I buy the shares for my holdings? Let’s take a closer look.
Tech-based media
As a quick reminder, Future is an international media and digital publishing business. It creates, provides, and maintains technology, and has relationships with leading brands throughout the world to bolster their presence and keep them in contact with their customers. Some of its technology includes website platforms, lead generation tools, and email delivery systems.
So what’s happening with Future shares currently? Well, as I write, they’re trading for 1,751p. At this time last year, the stock was trading for 3,594p, which is a 51% decline over a 12-month period. I believe the shares have dropped due to recent macroeconomic headwinds as well geopolitical factors. Furthermore, the business’ acquisition-led approach can be seen as risky, which affects investor sentiment too. I am not concerned by the share price drop. In fact, it could present a buying opportunity.
The best shares to buy have risks too
As mentioned above, acquisition-led business models are often seen as high-risk. This is because there is a greater chance of two major issues. Firstly, anyone can overpay for a business. Overpaying can affect a balance sheet, investor sentiment, operations, and eventually returns too. Next, if a newly added business fails to amalgamate into the existing offering, this can affect operations and performance. More importantly, it can often be costly to dispose of a failed acquisition. This is something I must be wary of relating to Future.
Even with technology adoption rising, I noted that Future performed exceptionally well during the pandemic period. This will have been due to consumers spending less time out and about socialising, and more time on their devices. I can’t help but think that perhaps this performance was a one-off and now that restrictions are easing, it may not be able to maintain its trading momentum.
The bull case and my verdict
So to the positives of Future shares then. Firstly, I note that it has an excellent track record of performance. I do understand that past performance is not a guarantee of the future, however. Looking back, I can see it has grown revenue and profit for the past four years in a row.
Next, Future shares pay a dividend, which would boost my passive income stream. Now the current dividend yield is minimal, under 1% in fact, but if it can continue growing performance, I don’t see why it can’t gradually increase this. I am aware that dividends can be cancelled at any time, however.
Finally, Future makes money from advertising on its websites and platforms, as well as affiliate fees such as those when someone purchases something from comparison sites, like GoCompare. With the reliance on smartphones and tablets for day-to-day activities, I believe Future could see its revenue and profit increase in the future.
Overall, I would add Future shares to my holdings. For me the positives outweigh the negatives and I believe Future shares could provide consistent returns for my portfolio in the future.
