Investing alongside you, fellow Foolish investors, here’s a selection of stocks that some of our contributors have been buying across the past month!
Barclays
What it does: Barclays is an international bank with operations including retail and investment banking.
By Charlie Keough. I already own Barclays (LSE: BARC) shares. But after tanking by around 5% following the release of its Q3 results, I decided to dive in and buy more of the stock.
The fall comes off the back of a set of underwhelming results. And with the bank forecasting earnings to be lower for the year, some investors were spooked.
Despite that, I see an opportunity. As I write, Barclays shares trade on a price-to-earnings ratio of below 4, signifying that they’re seriously undervalued.
On top of that, the stock offers investors a dividend yield of over 5.5%. Analysts have also predicted advances in its dividend over the next few years.
The risks with Barclays surround the ongoing threat presented by persistent inflation and high interest rates to match. The business has also forecasted some “material additional charges” in Q4 as it looks to lay the foundations for cost-cutting.
However, I’m a long-term investor, so that doesn’t phase me. And with its low valuation and meaty yield, I decided to top up my holdings.
Charlie Keough owns shares in Barclays.
Coca-Cola Co
What it does: Coca-Cola is one of the world’s largest beverage companies. Its brands include Coke, Sprite, Fanta, and Powerade.
By Edward Sheldon, CFA. Coca-Cola (NYSE: KO) shares have fallen in recent months. So, I bought some of the stock for my portfolio.
There’s so much to like about this business, to my mind.
For starters, its products are embedded within society. Go to any restaurant, cafe, bar, or corner shop in the Western world and the chances are, they will be selling Coca-Cola beverages. So, the company is not going away any time soon.
Secondly, the company has a great track record when it comes to generating wealth for shareholders. Not only has it generated strong capital gains over the long term but it has also paid out a lot of dividends (the yield is over 3% currently). It’s a ‘Dividend Aristocrat’ meaning that it has increased its payout for 50+ consecutive years.
As for why the share price has come down recently, a lot of it is down to concerns over the impact of weight-loss drugs. The theory is that these drugs will reduce demand for snacks and drinks. While this is a risk, I personally think the fears are overblown.
Edward Sheldon owns shares in Coca-Cola Co.
Games Workshop
What it does: Games Workshop makes fantasy products like tabletop gaming systems and licences its IP to media companies.
By Royston Wild. The Games Workshop (LSE:GAW) share price has fallen 16% from its record closing highs struck back in July. I felt the stock’s recent weakness was a dip-buying opportunity that was too good to ignore.
Trading at the fantasy wargaming giant has remained resolute in spite of the global cost-of-living crisis. Core revenues rose by a forecast-beating 14% during the three months to August, while licensing revenues doubled. This meant pre-tax profit soared 46% over the period.
Games Workshop shares spiked on the news but then resumed their recent downtrend. I think the market is missing a trick here, and expect the Nottingham company to rebound strongly from current levels.
The company’s Warhammer lines have a cult fanbase that is increasing across the globe. And it is increasing its store estate (which includes entering new territories) to add more hobbyists to its ranks.
With Games Workshop also looking to expand the licensing of its IP — it is currently in talks to develop screen content with Amazon — I believe the future is very bright.
Royston Wild owns shares in Games Workshop.
Kraft Heinz
What it does: Kraft Heinz manufactures and distributes branded packaged foods. Its largest market is the USA.
By Stephen Wright. Over the last month, shares in Kraft Heinz (NASDAQ:KHC) have fallen by 5.5%. I’ve owned this stock for some time and the cheaper it gets, the more I like it.
Inflation has been a recent problem for consumer businesses across the board. Higher input costs threaten to weigh on margins (and profits) unless companies increase their prices to customers.
The risk with this is that customers might refuse to pay higher prices and go elsewhere. But Kraft Heinz has so far managed to pass through costs reasonably well without losing sales volumes.
To me, this shows how strong the company’s brands are. And the business continues to innovate and invest for future growth.
At a price-to-earnings (P/E) ratio of 13, I think they’re available at a good price. The stock is one of Warren Buffett’s favourites and I’ve been buying it for my own portfolio recently.
Stephen Wright owns shares in Kraft Heinz.
Legal & General
What it does: Legal & General is one of the UK’s largest insurance and financial services firms.
By Ben McPoland. I continue to view Legal & General (LSE: LGEN) as one of the very best income stocks around. I thought that before this year’s 19% share price tumble. Now the dividend yield is pushing on for 10%, I just had to increase my holding.
As Warren Buffett said: “When it rains gold, put out the bucket, not the thimble.” So I’ve just scooped up large handfuls of shares for both my ISA and SIPP!
The share price has struggled due to macroeconomic uncertainty, which hasn’t gone away and might not for a while. But the dividend is supported by strong cash flows and a healthy balance sheet.
Plus, there should be some solid earnings growth over the long term due to an ageing population and the pensions de-risking trend. So I’d like to think there could be some healthy share price appreciation too, given enough time.
Overall, I reckon the risk/reward opportunity looks extremely favourable.
Ben McPoland owns shares of Legal & General.
MercadoLibre
What it does: The biggest e-commerce enterprise in Latin America with a full payments and logistics ecosystem for customers.
By Zaven Boyrazian. When it comes to Latin America, the largest e-commerce enterprise in the region is MercadoLibre (NASDAQ:MELI). But with management now expanding into Mexico, as well as its fintech, advertising, and logistics divisions running full steam ahead, the impressive growth seen to date may be the tip of the iceberg.
Fun fact: shares of this business are up nearly 300% in the last five years!
But while higher sales potential is undoubtedly encouraging, it’s the story surrounding margins that finally turned me into a shareholder this month.
Management’s diversification into areas like fintech had some nasty knock-on effects on profitability. But since 2019, operating margins have been on the rise, climbing from -6.7% to 16.3% as of June this year.
Obviously, the macroeconomic environment in this region of the world is far more extreme than here in the UK. Some of its operating countries are even tackling triple-digit inflation! But with a proven history of navigating such market conditions, I remain cautiously optimistic about the long-term.
Zaven Boyrazian owns shares in MercadoLibre.
