1 FTSE 100 stock I’d buy before the ISA deadline

Stephen Wright has a FTSE 100 stock that he thinks can provide great returns over the long term for investors looking for ideas before 5 April.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Calendar showing the date of 5th April on desk in a house

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

The time for using this year’s ISA allowance is running out. But there’s a FTSE 100 stock on my radar that I’d buy if I were an investor with cash to deploy before 5 April.

I’m a firm believer in the principle that investing in good businesses brings good investment returns. As such, I’d look to buy shares in Halma (LSE:HLMA).


Halma is a collection of smaller organisations focused on three specific areas. The first is industrial safety, the second is environmental monitoring, and the third is life sciences.

Usually, investors have to choose between a business with a dominant market position and one with good growth prospects. But with this company, I think they get the best of both.

Halma’s subsidiaries are focused on maintaining leading positions in niche markets. But the company grows its earnings by adding more businesses to its portfolio.

In other words, individually the subsidiaries are difficult to disrupt, but collectively their size means there is scope for growth. I think that makes it a great stock to own.


Halma’s business model has a good track record. Over the last 10 years, revenue, operating income, and earnings per share have all grown between 9% and 10% per year on average.

As a result, Halma’s share price has gone from £5.11 in March 2013 to £21.10 today. That’s an average increase of 15% per year.

The underlying business also has some really strong intrinsic features that make it durable. Chief among these is the fact it doesn’t cost much to run. 

Halma earns £417m in operating income using £194m in fixed assets. And capital expenditures account for less than 20% of the cash produced by its operations. 

That means the company can use most of the cash it generates to reduce debt, reinvest in the business, pay dividends, or fund buybacks. These make it attractive as an investment.


The biggest risk with Halma shares is price. At a price-to-earnings (P/E) ratio of 35, initially this doesn’t look like the kind of stock investors should be looking at with interest rates rising.

I don’t see any plausible way of arguing the stock is cheap. But I view this as a case where following Warren Buffett’s advice and buying a great company at a fair price is a good idea.

Ultimately, I expect the returns from the stock to follow the performance of the underlying over the long term. And I think Halma’s subsidiaries will do well for some time, causing the stock to follow.

For investors with a long-term outlook, this looks like a great stock to me. So if I had cash to invest before April 5th, I’d be buying it now, rather than hoping for a better price.

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 assessed. Consider taking independent financial advice.

Stephen Wright has no position in any of the shares mentioned. The Motley Fool UK has recommended Halma Plc. 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

Businessman use electronic pen writing rising colorful graph from 2023 to 2024 year of business planning and stock investment growth concept.
Investing Articles

Could the FTSE 100 be set to soar in 2024?

The FTSE 100 keeps threatening to go off on a growth spree. And weak sentiment keeps holding it back. But…

Read more »

Investing Articles

Is this FTSE 100 stalwart the perfect buy for my Stocks and Shares ISA?

As Shell considers leaving London for a New York listing. Stephen Wright wonders whether there’s an undervalued opportunity for his…

Read more »

Mature Caucasian woman sat at a table with coffee and laptop while making notes on paper
Investing Articles

3 things I’d do now to start buying shares

Christopher Ruane explains three steps he'd take to start buying shares for the very first time, if he'd never invested…

Read more »

Investing Articles

Investing £300 a month in FTSE shares could bag me £1,046 monthly passive income

Sumayya Mansoor explains how she’s looking to create an additional income stream through dividend-paying FTSE stocks to build wealth.

Read more »

Investing Articles

£10K to invest? Here’s how I’d turn that into £4,404 annual passive income

This Fool explains how using a £10K lump sum can turn into a passive income stream worth thousands for her…

Read more »

Investing Articles

1 magnificent FTSE 100 stock investors should consider buying

This Fool explains why this FTSE 100 stock is one for investors to seriously consider with its amazing brand power…

Read more »

Rainbow foil balloon of the number two on pink background
Investing For Beginners

2 under-the-radar FTSE 100 stocks under £2

Jon Smith identifies two FTSE 100 stocks that he believes are getting a lack of attention from some investors but…

Read more »

Investing Articles

£8,000 in savings? I’d use it as a start to aim for £30k a year in passive income

Here's how regular investing in the UK stock market, over the long term, could help us build up some nice…

Read more »