This week’s bout of weakness in the markets hasn’t deterred me from searching for the best stocks to buy.
Publishing
For example, I’m keen on illustrated book publisher Quarto (LSE: QRT). The company has UK and US divisions. And with the share price at 157p, its market capitalisation is around £66m.
One thing for me to bear in mind is the company’s president, Chuk Kin Lau, owns just over 50% of the shares. So, he has a controlling interest in the enterprise. But I’m comfortable with that setup.
In March, the company delivered a pleasing set of numbers for the 2021 trading year and an upbeat outlook statement. But, as with all businesses, there is no guarantee of further growth in the current year with all its economic and geopolitical challenges.
Nevertheless, I’m happy to own some of the company’s shares for the years ahead. And I’m looking forward to the half-year results report due on 30 August to learn more about operational progress.
Meanwhile, the price-to-earnings rating is running around seven. And I see that valuation as undemanding. However, the company doesn’t currently pay a shareholder dividend.
Mining services
I’m also holding mining services company Capital (LSE: CAPD). With the share price near 91p, the market capitalisation is around £174m. The business earns its living providing drilling, mining, maintenance, and geochemical laboratory solutions to customers in the minerals industry. And it focuses on the African markets.
Last week, the company posted a robust set of interim numbers covering the period to 30 June. And looking ahead, the directors raised their revenue guidance for 2022.
Executive chairman Jamie Boyton said the underlying demand in the market is “encouraging”. However, he expects some seasonal slowdown through the third quarter. But he pointed to a “buoyant” tender pipeline across drilling, mining, and laboratories as a reason for optimism.
Set against City analysts’ expectations, the forward-looking earnings multiple is just above four for 2023. And the anticipated dividend yield is about 4.3. I see the valuation as attractive despite the cyclical risks inherent in the sector.
Luxury goods
Finally, I decided to take a little slice of Burberry (LSE: BRBY) into my portfolio recently. And my shares sit in my account as part of my diversified long-term portfolio. The company operates as a global luxury goods manufacturer, retailer, and wholesaler. And as with all my recent stock purchases, I’m looking beyond the short-term economic challenges the world faces.
In July, with the first-quarter trading update, the company delivered an encouraging outlook statement. Sales in mainland China had been affected by ongoing lockdowns. But the directors said performance there had been “encouraging” since the company’s stores reopened in June. And the business is targeting high-single-digit percentage revenue growth and 20% margins “in the medium term”.
Meanwhile, City analysts expect earnings to advance by almost 27% in the current trading year to April 2023. And with the share price near 1,777p, the forward-looking earnings multiple is just over 15. There’s also a dividend to collect, yielding around 3%.
However, it’s possible for operational progress to stall and the company may miss its estimates. There isn’t much slack in the valuation to allow for setbacks. Nevertheless, I’m happy to hold my shares for the long haul to see if the company can progress its expansion plans.
