Investing alongside you, fellow Foolish investors, here’s a selection of listed companies that some of our contributors have been buying shares in across the past month!
Fresnillo
What it does: Fresnillo is the world’s largest primary silver producer and Mexico’s largest gold producer.
By Andrew Mackie: The Fresnillo (LSE: FRES) share price has underperformed in 2023, falling 25%as I write. Operational challenges over the past couple of years have resulted in it repeatedly failing to meet silver and gold production targets. However, I believe these issues to be in the rear-view mirror.
The opening of a new mine at Juanicipio will make a material contribution to its performance from 2023 onwards. It expects silver and gold production to reach annual averages of 11.7 moz and 43.5 koz respectively.
What really persuaded me to add to my position has been the strength of the underlying gold price. In 2022, it sold its gold for an average price of $1,800. Today, gold is near an all-time high of over $2,000. I am of the firm belief that the price of the yellow metal could be about to break out.
Although silver has not been quite as strong, it just had its first weekly close above a 12-year resistance line when the metal topped out at near $50 an ounce.
Many may be of the view that this rally could be short lived and will wait for clearer signs. As a value investor, I want to be ahead of the curve. That is why I recently added to my position.
Andrew Mackie has positions in Fresnillo.
J D Wetherspoon
What it does: J D Wetherspoon owns and operates pubs across the UK and Ireland. It’s known for providing food and drinks at reasonable prices.
By Harshil Patel. I recently bought shares in J D Wetherspoon (LSE:JDW). This is a well-run business that swung into profit in the second half of 2022. Prior losses came from a challenging time in the industry. It was significantly hit by higher food, energy and labour costs.
But the picture is improving. Supply and delivery issues have largely disappeared, according to its Chairman. And inflation is expected to fall this year. This should remove some pressure on profit margins.
Sales and profits have improved, but I reckon there’s more to go. Its share price has already soared by 64% this year, but it’s still far lower than highs reached in 2020 and 2021.
Bear in mind that macro-economic uncertainties remain. Higher borrowing costs could impact household finances and reduce money flowing to pub tills.
That said, this pub chain is known for value-for-money offerings, so I reckon it’ll remain resilient.
Harshil Patel owns shares in J D Wetherspoon.
Kitwave
What it does: Kitwave is a delivered wholesaler supplying food and drink to convenience stores, restaurants and cafes.
By Roland Head. I bought shares in wholesaler Kitwave (LSE: KITW) in early May, just after the company published an upbeat trading statement.
This business specialises in serving independent retailers and foodservice outlets, and has more than 40,000 customers. For Kitwave’s suppliers, the company provides a trusted route into a fragmented market.
Founder-CEO Paul Young has been in charge for 35 years and owns more than 15% of the shares. I reckon his interests should be aligned with those of shareholders.
One risk is that Kitwave’s regular acquisitions could lead to unsustainable levels of debt. However, I’ve not seen any sign of this so far.
Indeed, I was impressed by last year’s results, which showed good cash generation and attractive levels of profitability.
The shares have risen by nearly 80% over the last year, but still look good value to me on 10 times forecast earnings, with a 4% dividend yield.
Roland Head owns shares in Kitwave.
Persimmon
What it does: FTSE 100-listed Persimmon is one of the UK’s biggest housebuilders
By Paul Summers: Despite concerns that interest rates have further to climb, I’m continuing to load up on shares in housebuilder Persimmon (LSE: PSN). It seems I’m not alone. The stock is up roughly 6% in the last month.
I think a lot of this is down to the recent, better-than-expected update.
Back in April, the £4.4bn cap reported that trading over recent weeks had offered “signs of encouragement” with “cancellation levels normalising”. Indeed, Persimmon now thinks sales for this financial year could hit the top end of previous guidance of around 8,000 to 9,000 homes.
I’m conscious of not counting my chickens before they’ve hatched. However, news that inflation is finally coming down could send a message that interest rates will eventually follow. That would be great news for the sector.
In the meantime, I’m happy to continue collecting the (admittedly reduced) dividends that Persimmon throws off.
Paul Summers owns shares in Persimmon.
Scottish Mortgage Investment Trust
What it does: Scottish Mortgage Investment Trust invests in public and private global growth companies.
By Ben McPoland. It’s been a dreadful 18 months for investors in Scottish Mortgage Investment Trust (LSE: SMT).
The shares are down more than 50%, and have been trading at a significant discount to the underlying value of the trust’s assets for some time now. And, with interest rates still heading northwards, there’s a risk the stock could remain out of favour for a while yet.
Nevertheless, I’ve recently been buying more shares, as I’m encouraged by the progress being made by companies across the portfolio. Especially in the field of artificial intelligence (AI), where holdings ASML and Nvidia are supplying the picks and shovels needed for the AI gold rush.
Elsewhere, Swedish private company Northvolt, the maker of lithium-ion batteries for electric vehicles, continues to scale up impressively. I’d be surprised if this firm wasn’t a much larger enterprise in five years time, which is my investment horizon here.
Ben McPoland owns shares in Scottish Mortgage Investment Trust, ASML and Nvidia.
Taylor Wimpey
What it does: Taylor Wimpey is one of Britain’s largest housebuilders and is known to be one of the big five developers in the country by number of houses built per year.
By John Choong: House prices may be declining, but that decline may be coming to an end soon, with Taylor Wimpey’s (LSE:TW) most recent trading update showing some encouraging green shoots. Although mortgage rates are still higher than they were before the mini-budget crisis, they’ve come down rather substantially since.
Affordability is starting to tick up, and that’s been evident through the latest official and third party data. For instance, mortgage approvals are starting to climb back up. Meanwhile, figures from the Royal Institution of Chartered Surveyors’ survey seem to have hit a bottom, in line with GfK consumer confidence data.
Therefore, it’s no surprise to see Taylor Wimpey report encouraging guidance in its Q1 trading update. Management cited improvements to sales rates, with cancellations heading in the other direction. As such, CEO Jennie Daly reiterated the firm’s guidance to build 9,000 to 10,500 homes this year. Considering the better outlook and the stock’s relatively cheap multiples, I’ve been buying Taylor Wimpey shares hand over fist.
| Metrics | Taylor Wimpey | Industry Average |
| P/B ratio | 1.0 | 0.9 |
| P/S ratio | 1.0 | 0.8 |
| P/E ratio | 6.9 | 10.5 |
| FP/S ratio | 1.4 | 1.2 |
| FP/E ratio | 14.3 | 12.2 |
John Choong has positions in Taylor Wimpey.
