Investing alongside you, fellow Foolish investors, here’s a selection of shares that some of our contributors have been buying across the past month!
Barclays
What it does: Barclays moves, lends, invests and protects money for customers and clients in over 40 countries.
By James Beard. Barclays (LSE:BARC) isn’t the best performing UK bank at the moment but I think it’s the one with the biggest potential. That’s why I bought some of its shares last month.
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With a price-to-book ratio of 0.45, and a 12-month trailing price-to-earnings ratio of 7.1, the stock appears to offer good value. By 2026, analysts are expecting earnings per share to grow by nearly 60%, compared to their anticipated 2024 level. That’s because the bank’s seeking to improve its poor return on capital which lags behind that of its FTSE 100 peers.
However, there are risks. There’s no guarantee that the turnaround plan will work and banking stocks can be volatile. Bad debts could also be a problem if the global economic recovery stalls.
But I have confidence in the bank’s chief executive who plans to reduce costs by £2bn – and return at least £10bn to shareholders – over the next three years.
James Beard owns shares in Barclays.
First Solar
What it does: First Solar is one of America’s leading solar energy companies, known for thin-film solar panels.
By Oliver Rodzianko. I bought First Solar (NASDAQ:FSLR) recently after its valuation improved.
Management is expanding its manufacturing capacity through two new facilities set to be operational by late 2025. This is crucial to meeting the continued high demand for solar power. It also positions it as a key competitor against Chinese solar companies.
Analysts expect the company to achieve year-on-year revenue growth of 35.5% in 2024 and 26% in 2025. If its valuation also expands, then the returns over the next two years could be very large indeed.
However, China controls over 80% of the global solar supply chain. These businesses could put pricing pressure on First Solar, inhibiting its share price growth.
That being said, I’m bullish on Western green energy. First Solar is one of the strongest US solar investments I know.
Oliver Rodzianko owns shares in First Solar.
Five Below
What it does: Five Below runs a chain of retail outlets selling on-trend items to teenagers priced (mostly) at $5 or less.
By Stephen Wright. Shares in US retailer Five Below (NASDAQ:FIVE) have fallen 57% over the last 12 months. And they’ve reached a point where I think they look like terrific value.
The company is heavily exposed to households with an income below $50,000 per year. That makes the risk of an economic downturn significant for the business.
Despite this, Five Below has some impressive growth prospects. It’s looking to expand its store count at a rate of 12% per year for the next few years.
Normally, this would involve taking on debt. But with new outlets breaking even by the end of the year, the company shouldn’t need to expose its balance sheet to danger in order to achieve its goals.
With the stock falling to a price-to-earnings (P/E) ratio of 15, I saw my chance and went for it. It’s started to rally already, though, so I’m on the lookout for another opportunity.
Stephen Wright owns shares in Five Below.
Taylor Wimpey
What it does: One of the UK’s largest home construction companies, building everything from apartments to six-bedroom homes.
By Mark David Hartley. With the new Labour government coming into power, I’ve noticed renewed enthusiasm about building low-cost housing. Affordable housing accounted for 21% of builds performed by Taylor Wimpey (LSE: TW.) in 2022, so it’s in good stead to benefit from this surge.
Falling interest rates could also help but for now, the UK’s economic outlook remains unclear. Housing is particularly sensitive to this, so that presents a risk to the stock. Delays and unexpected costs are another concern, as the Middle Eastern conflict threatens material deliveries via the Suez Canal.
With earnings forecast to grow, the stock’s price-to-earnings (P/E) ratio could drop from 24 to 18 in the next 12 months. But that’s still above the industry average, so growth may be slow this year. Fortunately, it has an attractive 5.8% yield, so it makes a great addition to my dividend portfolio either way.
Mark David Hartley owns shares in Taylor Wimpey.
Xtrackers MSCI World Value UCITS ETF
What it does: Xtrackers MSCI World Value UCITS ETF invests in hundreds of global shares using a value strategy.
By Royston Wild. Buying value shares can have significant benefits for investors. I’ve chose to increase my own exposure to this category by recently opening a position in the Xtrackers MSCI World Value UCITS ETF (LSE:XDEV).
Value stocks can deliver market-beating capital appreciation over time as investors wake up to their cheapness. These shares can also be more stable during economic downturns as their low valuations already reflect potential profit risks.
This particular ETF tracks the performance of the MSCI World Enhanced Value Index, which comprises 400 large- and mid-cap companies across 23 developed markets. Major holdings include US tech stocks Cisco Systems, Qualcomm and IBM.
With a price-to-earnings (P/E) ratio of 9.6 times and 5.19% dividend yield, the fund offers excellent all-round value for money.
On the downside, this Xtrackers product may underperform during a sustained bull market. During these periods, investors tend to favour growth shares over value stocks. But over the long term I’m confident it will prove a valuable addition.
Royston Wild owns Xtrackers MSCI World Value UCITS ETF.
