UK shares to buy now: with a £1,000 lump sum, here’s what I’d do

Zaven Boyrazian talks through how he’d look for the best shares to buy now for his portfolio and identifies one growth business that’s on his radar.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

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.

Finding the best shares to buy is a challenge that almost all investors encounter. Sometimes, we’re lucky enough to stumble on a lump sum of capital. And while there are alternative investing options to the stock market, UK shares have proven to be a terrific source of returns over the long run.

Even after enjoying a rally so far this year, the British stock market’s still filled with terrific buying opportunities. So if I had a £1,000 lump sum right now, here’s how I’d go about finding them.

Start at the portfolio

My investing journey started over a decade ago. And during that time my portfolio’s grown and changed. As such, finding new companies to diversify into isn’t really a top priority for me anymore. As such, whenever I start looking for the best shares to buy, I always begin with companies I already own. And that’s what’s brought dotDigital (LSE:DOTD) to the forefront.

Should you invest £1,000 in Legal & General right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Legal & General made the list?

See the 6 stocks

This small-cap digital marketing group has developed a multi-channel cloud-based advertising platform. It enables marketing experts from various businesses, particularly in the e-commerce space, to create, manage, and run their own ad campaigns.

There are a lot of platforms like this out there today, resulting in a lot of competition, especially when it comes to e-mail-based solutions. However, dotDigital has nevertheless managed to carve out a sizable niche over the years. And looking at the group’s latest progress, its market share seems to be getting wider.

The launch of its artificial intelligence (AI) analytics platform in 2023 now enables marketing teams to analyse their mailing lists to granular details where predictions can be made. dotDigital’s AI forecasts which individuals are likely to spend more money, how much, and when, paving the way to highly personalised and effective marketing that boosts spending across the board. And so far, we’ve already seen the company’s average revenue per customer jump almost 30% in just one year.

A buying opportunity?

Over the last couple of quarters, dotDigital’s revenue, cash flow, and earnings have all been heading in the right direction. More encouragingly, the trends show that this growth’s accelerating. After over a year of going through an advertising winter on the back of higher inflation, it’s a welcome sight for shareholders.

Despite this upward trend, the share price is still moving in the wrong direction, falling by around 15% since January. It seems that investors want to see more progress before granting this business a new wave of momentum. And after seeing the stock collapse by 80% in the wake of the 2022 stock market correction, this isn’t all that surprising.

However, at a forward price-to-earnings ratio of 17, dotDigital seems to be trading at a reasonably cheap valuation, especially in comparison to its historical average of around 30 times earnings. There’s no denying that fierce competition’s a significant threat. But with management seemingly successfully capitalising on the tailwinds of improving economic conditions, it’s a risk I feel’s worth taking at today’s prices.

That’s why I believe dotDigital could be one of the most rewarding shares to buy today for my portfolio, if I had the cash to spare.

Should you buy Legal & General shares today?

Before you decide, please take a moment to review this first.

Because my colleague Mark Rogers – The Motley Fool UK’s Director of Investing – has released this special report.

It’s called ‘5 Stocks for Trying to Build Wealth After 50’.

And it’s yours, free.

Of course, the decade ahead looks hazardous. What with inflation recently hitting 40-year highs, a ‘cost of living crisis’ and threat of a new Cold War, knowing where to invest has never been trickier.

And yet, despite the UK stock market recently hitting a new all-time high, Mark and his team think many shares still trade at a substantial discount, offering savvy investors plenty of potential opportunities to strike.

That’s why now could be an ideal time to secure this valuable investment research.

Mark’s ‘Foolish’ analysts have scoured the markets low and high.

This special report reveals 5 of his favourite long-term ‘Buys’.

Please, don’t make any big decisions before seeing them.

Claim your free copy now

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.

Zaven Boyrazian has positions in Dotdigital Group Plc. The Motley Fool UK has recommended Dotdigital Group 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.

We think earning passive income has never been easier

Do you like the idea of dividend income?

The prospect of investing in a company just once, then sitting back and watching as it potentially pays a dividend out over and over?

If you’re excited by the thought of regular passive income payments, as well as the potential for significant growth on your initial investment…

Then we think you’ll want to see this report inside Motley Fool Share Advisor — ‘5 Essential Stocks For Passive Income Seekers’.

What’s more, today we’re giving away one of these stock picks, absolutely free!

Get your free passive income stock pick

More on Investing Articles

artificial intelligence investing algorithms
Investing Articles

Up 272% in just a year, is Palantir stock just getting started?

This writer recognises that Palantir has grown its business very well -- but does the stock price offer him an…

Read more »

Runner standing at the starting point with 2025 year for starting in new year 2025 to achieve business planing and success concept.
Investing Articles

Up 50%? The Aston Martin share price forecast is mind-blowing! 

If analysts are right, the Aston Aston Martin share price could absolutely rocket in the year ahead. Harvey Jones says…

Read more »

Investing Articles

As the S&P 500 drops, here are 2 Stocks and Shares ISA holdings I’m watching

Our writer has different views on how President Trump's tariffs might affect these two US holdings in his Stocks and…

Read more »

Surprised Black girl holding teddy bear toy on Christmas
Investing Articles

£10,000 invested in Tesla stock at Christmas is now worth…

Tesla stock has been one of best-performing investments of the past decade. But things haven't gone to plan for investors…

Read more »

Investing Articles

Up 279% in 5 years, could Meta stock keep soaring?

Meta stock has more than tripled in five years. This writer sees lots to like about the business but also…

Read more »

Pink 3D image of the numbers '2025' growing in size
Investing Articles

25% total return in a year? Is now the perfect time to buy BP shares?

BP shares are on the front line of today's global economic and political uncertainty but analysts think they can still…

Read more »

Affectionate Asian senior mother and daughter using smartphone together at home, smiling joyfully
Investing Articles

With Cash ISA changes coming, could now be the time to consider buying shares?

Changes to the Cash ISA could lead to greater investment in the stock market. This could be a good thing…

Read more »

Investing Articles

These FTSE 100 dividend shares just got cheaper, thanks to President Trump!

Investors buying dividend shares can lock in bigger long-term yields when share prices take a tumble. These two just did…

Read more »