Investing alongside you, fellow Foolish investors, here’s a selection of stocks that some of our contributors have been buying across the past month!
A.G. Barr
What it does: A.G. Barr is a drinks company. Its main product is Irn Bru and it has recently added Boost via an acquisition.
By Stephen Wright. Shares A.G. Barr (LSE:BAG) fell after the latest trading update. Narrower margins meant profits came in lower than expected.
I think, however, this is a short-term issue and the long-term picture looks much more positive. That’s why I’ve taken the opportunity to buy the stock for my portfolio.
My investment thesis for A.G. Barr is based on two ideas. One is that margins are going to expand as the company completes its integration of Boost Drinks, which should boost(!) profitability.
The other is the price-to-earnings (P/E) multiple is going to increase as a result. Right now, the stock is trading at a P/E ratio below its 10-year average and I expect this to improve if profits grow.
A.G. Barr has recently changed its CEO, which makes the strategy a little uncertain going forward. But I think there’s enough margin of safety in the stock at the moment to make it worth the risk.
Stephen Wright owns shares in A.G. Barr.
Alphabet
What it does: The owner of Google and YouTube, Alphabet is one of the largest technology companies in the world.
By Edward Sheldon, CFA. Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) shares have pulled back sharply in recent months and I’ve been buying the dip.
There are a few reasons the stock has fallen. One is that regulators, including the US Department of Justice, are targeting the company due to its dominance. Another is that there are some concerns that Google’s search business could be disrupted by ChatGPT and other generative AI applications.
These are both genuine risks. However, after the pullback, I reckon a lot of uncertainty is priced in. In my view, the valuation (the P/E ratio is in the low 20s), and risk/reward proposition, now look attractive.
Looking ahead, I’m convinced that Alphabet has plenty of growth potential. Today, YouTube revenues are growing at an impressive rate as are cloud computing revenues. And in the long run, Waymo’s self-driving taxis – which are on the roads in some US cities already – could provide a whole new source of revenue.
Overall, I’m excited about the outlook for this stock.
Edward Sheldon owns shares in Alphabet .
Aston Martin Lagonda
What it does: Founded in 1913, Aston Martin is a luxury sports car manufacturer that designs, engineers and produces sports cars in Warwickshire, and sells them worldwide.
By Harvey Jones. I thought long and hard before buying shares in James Bond car maker Aston Martin Lagonda (LSE: AML). Then stupidly, I went ahead and did it anyway.
I’d been monitoring the FTSE 250 stock on and off for years, watching the shares fall until I didn’t think they could fall anymore.
First-half results disappointed, as Aston Martin’s results usually do, but on 24 July the board flagged up a big second-half recovery and I thought why not?.
On 16 September I dived in and exactly two weeks later my shares crashed 33% after the board warned full-year profits would decline due to supply chain disruption and weak demand in China. So no second-half recovery, then.
No worries, I’m sure it’ll happen next year. Or the year after that. I won’t sell but it could be a long wait before I recoup my big early loss, assuming I ever do.
I don’t think the global economy or luxury demand is about to roar into life, while Aston Martin still has to make the shift into electric motors. I’m bracing myself for a bumpy ride.
Harvey Jones owns shares in Aston Martin.
Aviva
What it does: Aviva is one of the UK leading financial services providers, as well as a big player in Ireland and Canada.
By Royston Wild. Aviva’s (LSE:AV.) share price has leapt to six-year peaks above 500p recently. But on paper it still looks remarkably cheap, so I’ve increased my stake for the second time since early June.
The FTSE 100 insurer trades on a forward price-to-earnings growth (PEG) ratio of 0.5. A reading below 1 indicates that a stock is undervalued.
On top of this, the prospective dividend yield is a mighty 7.2%. That’s more than double the Footsie average of 3.5%.
Aviva’s shares have increased as expectations for multiple interest rate cuts have strengthened. On the downside, this leaves the company at risk of sharply reversing if the Bank of England fails to deliver what the market expects.
But I don’t care. I invest for the long term, and reckon Aviva’s share price will rise much higher from current levels. I predict that steady demographic changes, allied with growing interest in financial planning, will drive demand for its products through the roof.
A strong balance sheet should allow Aviva to effectively exploit this opportunity, too. Its Solvency II capital ratio has moved further above 200% in 2024.
Royston Wild owns shares in Aviva.
Logistics Development Group
What it does: Logistics Development Group is an investment vehicle that, through a subsidiary, owns stakes in listed and private businesses.
By Christopher Ruane. I own a few penny shares in my portfolio already and recently added another one: Logistics Development Group (LSE: LDG).
The company’s operating subsidiary owns stakes in businesses like Finsbury Food Group and Alliance Pharma.
An activist shareholder has requisitioned a general meeting, hoping shareholders will vote for the firm to stop making new investments and prioritise returning cash to shareholders.
This is an unusual investment for me but I see potential value. The share has been trading at a significant discount to net asset value. At the end of May, net assets were £99m, of which net cash was close to £32m. The current market capitalisation is £64m.
The general meeting could help close that valuation gap. One risk when selling unlisted investments is whether their paper valuation can actually be achieved in the market. But I think the current Logistics Development Group share price looks like a bargain.
Christopher Ruane owns shares in Logistics Development Group.
Next
What it does: Next is a retailer selling clothing, homeware and beauty products both online and in its 800 stores.
By James Beard. The Economist recently described Next (LSE:NXT) as a “boring brand”. And yet record revenue and earnings for the year ended 27 January 2024 (FY24) shows that slow and steady sometimes wins the race.
In FY25, it expects to do better with a pre-tax profit of £995m. It therefore trades on a reasonable 15.9 times forward earnings.
As well as growing organically, it’s been building equity stakes in other fashion retailers. It plans to further expand overseas and hopes to generate additional income from licensing its brands and technology platform to third parties.
And with approximately 60% of its revenue being generated online, it’s successfully managed to embrace the internet.
But there are potential challenges. Fashion consumers are notoriously fickle. And a lacklustre British economy could also impact sales.
However, I think the company’s well positioned to continue to grow which is why I recently added the stock to my portfolio.
James Beard owns shares in Next.
Next
What it does: A multinational retailer of clothing, footwear, accessories, and homeware with 700 stores worldwide.
By Mark David Hartley. At almost £100 a share, Next (LSE: NXT) is one of my more pricey investments. But it’s also the largest clothing retailer by sales in the UK with a well-established brand, diverse product range and rapidly growing online presence. It has a history of consistent financial performance and a relatively reliable dividend track record. The company’s focus on own-brand products gives it greater control over margins and pricing, and its online platform provides a significant source of revenue and growth potential.
Retail is highly competitive, though, and economic downturns or changing consumer habits could negatively impact sales. Additionally, its reliance on online sales could be affected by technological disruptions or increased competition from other e-commerce platforms. Even fluctuations in the British pound could impact Next’s international operations and financial results. But with a price-to-earnings ratio of 14.7, I think the current price offers good value and has room to grow.
Mark David Hartley owns shares in Next.
Windward
What it does: Windward’s AI platform leverages advanced machine learning and behavioural analytics to provide real-time insights and predictive intelligence for the maritime industry.
By Ben McPoland. I recently added to my holding in Windward (LSE: WNWD) after the small-cap stock dropped 25%. The £117m company helps organisations mange risk on the high seas. Unfortunately, there’s a lot more of that these days with wars raging and geopolitical conditions worsening.
The firm said it had made a strong start to H2, winning two new government customers for a total of $1.9m of annual contract value (ACV). This adds to the $37.2m of ACV it reported in H1, which represented 35% year-on-year growth.
The biggest risk here is that the business is still loss-making. However, management expects that to change over the next couple of years. On 10 October, CEO and co-founder Ami Daniel said: “We are laser-focused on achieving profitability while continuing to execute against our product roadmap to deliver an enhanced offering for our customer base.”
Speaking of customers, Windward has already attracted blue-chip names like BP, Shell, and Interpol. And adoption of its recently launched MAI Expert, a proprietary generative AI agent, has been strong, with six existing and several new commercial customers signing up.
At the end of June, the company had a cash balance of $13.8m.
Ben McPoland owns shares in Windward.
Yu Group
What it does: Yu Group is an independent supplier of gas, electricity, water and metering services to UK business customers.
By Roland Head. I recently bought some Yu Group (LSE: YU.) shares after this £270m company reported a 60% rise in half-year revenue and a 52% increase in earnings per share.
Changing energy prices can affect revenue and profits at utilities. But I was excited to see this financial growth was backed by a big increase in Yu’s customer base.
The company says that the number of meter points supplied rose by 82% to 72,300 during the first half of this year. This was paired with a 110% increase in the equivalent volume of energy supplied to 1.0TWh.
Smaller energy suppliers have a chequered record in the UK. Many have failed in recent years. I think Yu will need to stay disciplined as it expands to avoid the risk of financial problems.
However, with the stock trading on seven times earnings and offering a 4% yield, I think Yu shares could do well if growth continues.
Roland Head owns shares in Yu Group.
Zscaler
What it does: The company focuses on cloud-based cybersecurity solutions primarily for enterprise customers.
By Oliver Rodzianko. I recently invested in Zscaler (NASDAQ:ZS) as its valuation has become significantly more attractive. For example, its forward price-to-sales (P/S) ratio is currently 58% below its five-year average, making it a compelling opportunity.
Zscaler’s investment potential is further supported by a consensus of 39 analysts, forecasting a 21% growth in revenue by fiscal 2026, following an equal 21% growth estimated for 2025. Additionally, the consensus price target suggests a 28.5% gain over the next 12 months.
However, the company has not yet reported any official net income, though it’s nearing profitability. Any delays in reaching this milestone could result in further losses, as the stock is already down 19.5% year-to-date.
That said, cybersecurity is a rapidly growing industry, and I wanted to be part of it. While valuations in this sector tend to be high, Zscaler offered the most attractive option I could find.
Oliver Rodzianko owns shares in Zscaler.
