Every month, we ask our freelance writers to share their top ideas for shares to buy with investors — here’s what they said for January!
[Just beginning your investing journey? Check out our guide on how to start investing in the UK.]
Assura
What it does: Assura is a real estate investment trust (REIT) that operates more than 600 primary healthcare properties.
By Royston Wild. Shares in property stocks like Assura (LSE:AGR) picked up momentum towards the tail end of 2023. They were pushed higher by rising expectations of interest rate cuts kicking off early in the New Year.
Given the pace at which UK inflation is falling, I think further share price gains could be possible in January. Lower interest rates boost REITs’ net asset values (NAVs) and reduce their borrowing costs.
Healthcare specialist Assura is in my opinion a great stock to own in these uncertain times. It operates in a rock-solid part of the property market where rents are guaranteed by government bodies.
Accordingly, City analysts expect earnings here to steadily rise over the short-to-medium term. This also leads to predictions of further solid dividend growth.
Despite recent share price strength Assura still offers a tasty dividend yield. This sits at 6.6% for this financial year (to March 2024), almost double the average of 3.4% for FTSE 250 shares.
Royston Wild does not own shares in Assura.
RS Group
What it does: RS Group is a British leader in electrical products and services with clients all around the world.
By Oliver Rodzianko. RS Group (LSE:RS1) is my favourite British company I have a stake in. I bought the shares for the first time in October 2023, and they rose 10% in price by mid-December.
I know it may be a rocky road to high profits for my investment, as the shares have been down for some time.
However, it has a 10-year average annual revenue growth rate of around 8.50% and a three-year average of 13%. So, I think this is a value and a growth play in one.
I think the greatest risk here is the patience needed for the shares to turn around. All of the financials are lined up for it to do so, in my opinion. It’s just a matter of holding my nerve.
I think it’s impossible to pick the bottom of a downtrend, so I’m buying more now. Especially with a gross margin of almost 45%!
Oliver Rodzianko owns shares in RS Group
Scottish Mortgage Investment Trust
What it does: Scottish Mortgage Investment Trust aims to identify, own and support the world’s most exceptional growth companies.
By Paul Summers. In contrast to what I expected earlier in the year, shares in FTSE 100-listed investment trust Scottish Mortgage (LSE: SMT) will be ending 2023 on the front foot.
I now think there could be more to come in January and beyond. This is assuming that nothing comes along to shake the market’s conviction that interest rates will be cut before long. The sort of positions it holds, including those in hard-to-value private companies, are ideal for a risk-on environment.
One other thing worth highlighting is that the portfolio is truly active. In other words, it doesn’t look too similar to any major index. This is important for me considering that the ‘Magnificent Seven’ tech stocks have recovered strongly this year and may moderate in 2024.
As the icing on the cake, a low management charge of 0.34% is cheaper than some passive funds.
Paul Summers owns shares in Scottish Mortgage Investment Trust
Serco Group
What it does: Serco Group partners with governments around the world to deliver essential public services.
By Charlie Carman. Serco Group (LSE:SRP) is my best British share to buy for January.
Although some investors might be concerned by Serco’s reliance on the public purse, demand for the outsourcer’s services looks robust as we enter the new year.
Immigration remains a pressing priority for European governments. Serco’s already reaping the rewards. Its Justice & Immigration division delivered 88% revenue growth to £621m in the UK and Europe during the first half.
Further expansion could push revenues even higher. The company recently acquired European Homecare, which manages facilities for 36,000 asylum seekers in Germany.
Elevated geopolitical tension is another tailwind. Serco’s defence revenues continue to advance across all geographic markets.
Granted, providing high-profile public services carries reputational risks. Serco shares have never recovered to their former levels after plummeting amid a prisoner tagging scandal in 2013.
Nonetheless, with a forward P/E ratio below 10.5, the risk/reward profile looks attractive to me today.
Charlie Carman does not own shares in Serco Group.
