3 world-class recovery stocks I’d buy and hold in a Stocks and Shares ISA for decades

Harvey Jones is looking to load up his Stocks and Shares ISA and reckons now is a great time to consider these three FTSE 100 companies.

| More on:
Group of young friends toasting each other with beers in a pub

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.

I’ve got an empty Stocks and Shares ISA and I’m desperate to fill it. But I’m not making short-term decisions here. I only want to buy stocks that I reckon are worth holding for years and with luck, decades. This will give the share price and my reinvested dividends plenty of time to compound and grow. With that in mind, I’d buy these three FTSE 100 stocks today.

FTSE 100 turnaround play

After a torrid time, Scottish Mortgage Investment Trust (LSE: SMT) appears to have found its way again. I’m delighted it has, because I bought shares in the FTSE 100-listed stock last year. It’s up 29.1% over the past 12 months.

I’ll admit I was in two minds about buying it. Scottish Mortgage had lost half its value in 2022, when the tech stocks it mostly invested in crashed. James Anderson, the driving force in its golden years, had retired. I wasn’t sure new lead manager Tom Slater could fill his boots. It’s a risky fund, with a high percentage of its portfolio in unquoted companies.

But I took a chance and I’m glad I did. When interest rates are cut, it could perform even better. There’s no doubt plenty of volatility to come. But with a long-term view, I hope the overall trajectory is up.

I also bought consumer goods giant Unilever (LSE: ULVR) last year, and for the same reason. The share price has been smashed as management lost its way, while inflation drove up costs and made customers feel poorer. It was on the wrong side of the economic cycle.

Unilever is one of the UK’s biggest and best blue-chips. I decided it couldn’t stay down forever. People are still buying toiletries, deodorants and cleaning products, and Unilever boasts some of the biggest brands in the world. It’s slowly getting its focus back.

Equity fight back

Again, the Unilever share price recovery appears to be under way. It’s up 15.41% in six months, albeit just 8.51% over the year. When the cost-of-living crisis eases, I hope for more growth. Plus there are dividends, with a current yield of 3.37%. And now a share buyback.

My final recovery play is Burberry (LSE: BRBY). This is another stock that’s taken a beating, its shares crashing 52.79% over 12 months. I find that kind of drop irresistible, providing the underlying company is still solid, and I think Burberry is. So I bought it just a few weeks ago.

Burberry took a hit from slowing demand for luxury goods as the global economy struggled, while Chinese consumers have been feeling poor than they did.

Management is also struggling with strategy, torn between targeting the super-exclusive end of the luxury market, or leaving the door open for aspirational consumers. It’s decided to aim high, and had better not miss.

I think it’ll come good in the longer run, but this will take time. While I wait, I’ll buy more on the dips and reinvest its chunky 5.89% yield to build my stake. 

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.

Harvey Jones has positions in Burberry Group Plc, Scottish Mortgage Investment Trust Plc, and Unilever Plc. The Motley Fool UK has recommended Burberry Group Plc and Unilever 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

Young black man looking at phone while on the London Overground
Investing Articles

1 delicious penny stock I reckon can deliver juicy returns and growth

This food delivery penny stock has experienced a surge in performance and uptake recently. Our writer is excited by its…

Read more »

Investing Articles

If I’d bought Rolls-Royce shares the day Tufan Erginbilgiç joined here’s what I’d have now

Harvey Jones is startled by just how fast the Rolls-Royce share price has risen since its transformative CEO took over.…

Read more »

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

How much do I need to invest in Lloyds shares to earn income of £1,000 a year?

Harvey Jones is getting income and growth from his Lloyds shares but wished he'd bought more of them. So he's…

Read more »

Illustration of flames over a black background
Investing Articles

Down 75%! Will the Saga share price ever be loved again?

The last few years have been incredibly difficult for those watching the Saga share price. But what does the future…

Read more »

Investing Articles

What kind of return could I expect by investing £100 monthly in a Stocks and Shares ISA?

Using a Stocks and Shares ISA to avoid capital gains tax could grow a £100 monthly investment into a second…

Read more »

Young woman working at modern office. Technical price graph and indicator, red and green candlestick chart and stock trading computer screen background.
Investing Articles

Can strong operational momentum keep the Informa share price rising?

FTSE 100 company Informa has been performing well, but this may be just the beginning of a multi-year trend for…

Read more »

Market Movers

What’s going on with the Britvic share price?

Jon Smith flags up why Britvic's share price is surging on Friday, but believes that the company is in a…

Read more »

Cheerful young businesspeople with laptop working in office
Dividend Shares

2 super-cheap passive income shares I’m eyeing up right now

Jon Smith discusses two of his favourite passive income shares in the banking and property sectors, both featuring yields above…

Read more »