After rising a stunning 97% is this FTSE star still my best share to buy today?

This time last year Harvey Jones declared FTSE 100 data analytics firm RELX to be the best share to buy. So has it lived up to its star billing over the last 12 months?

| 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.

Almost exactly a year go (26 November 2023), I declared which UK company I thought had been the best share to buy at the start of the year. That was FTSE 100 information and analytics firm RELX (LSE: REL).

There were so many things to like about RELX. It was a bone fide UK tech star, having outpaced the Nasdaq since the start of the Millennium, growing almost five-fold.

It also seemed likely to benefit from the artificial intelligence (AI) revolution, as it harnessed the ground-breaking tech to enrich its proprietary datasets.

Should you invest £1,000 in HSBC 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 HSBC made the list?

See the 6 stocks

RELX, didn’t do it

It had actually been sitting on my buy list since June last year but, stupidly, I’d never got around to buying it.

Back then, the share price stood at 2,646p. By last November, it had climbed 15% to 3,055p. Today, I’d have to pay 3,719p per share. That’s an increase of another 21.7% over the year. Over five years, the RELX share price is up 97.98%. So I’m still kicking myself.

Created with Highcharts 11.4.3RELX PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

So what stopped me buying RELX? It always looked so pricey, trading at around 30 times earnings. At the time, I was on a FTSE 100 bargain hunt, mopping up dirt cheap dividend stocks with valuations closer to five or six times earnings. But RELX has taught me that a high yield and low price-to-earnings ratio isn’t everything.

Its shares are still expensive today, trading at 32.65 times earnings with a relatively meagre trailing yield 1.54%. That’s better than it looks though, because the board has a strong track record of dividend growth. In July, it hiked the interim dividend by 7%, for example.

A trading update on 24 October reported that underlying revenues had grown 7% for the first nine months of the financial year, with positive momentum across the group. The board anticipates another year of strong underlying revenue and adjusted operating profit growth.

I should buy this growth stock in December

On 8 November, JP Morgan Cazenove lifted its share price target for RELX from 4,200p to 4,550p, as its Legal and STM (scientific, technical & medical) looked set to enjoy AI-powered growth.

In total, 11 analysts follow RELX and they offer a lower median one-year share price forecast of 4,023p. That’s up 7.97% from today. JP Morgan’s is one of the more recent and suggests growth of 22.2%.

As yet, we don’t know for sure whether AI will prove the great game-changer. Anyone who has played around with chatGPT software has found it has limitations, and cannot be relied upon for 100% accuracy. Or anywhere near.

Plus its fortunes are still tied to the economic cycle. These are uncertain times as inflation proves sticky and sales could take a hit if sectors such as legal or financial services struggle.

But with RELX growing strongly, including through acquisitions, and launching regular share buybacks I think it looks well set for 2025 too.

Now this time I plan to act on that and buy it. If it’s not the very best FTSE 100 share for me to buy today, it’s not far off.

Should you buy HSBC now?

Don’t make any big decisions yet.

Because Mark Rogers — The Motley Fool UK’s Director of Investing — has revealed 5 Shares for the Future of Energy.

And he believes they could bring spectacular returns over the next decade.

Since the war in Ukraine, nations everywhere are scrambling for energy independence, he says. Meanwhile, they’re hellbent on achieving net zero emissions. No guarantees, but history shows...

When such enormous changes hit a big industry, informed investors can potentially get rich.

So, with his new report, Mark’s aiming to put more investors in this enviable position.

Click the button below to find out how you can get your hands on the full report now, and as a thank you for your interest, we’ll send you one of the five picks — absolutely free!

Grab your FREE Energy recommendation 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.

Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK has recommended RELX. 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

Person holding magnifying glass over important document, reading the small print
Investing Articles

Is the rare dip in this FTSE powerhouse’s share price just the right time for investors to consider buying it?

This FTSE 100 banking giant has seen its price tumble following the US tariffs news, but could the rare dip…

Read more »

Investing Articles

After an 18% fall, is Rolls-Royce’s share price now just too cheap for me to ignore?

Rolls-Royce’s share price was caught in the recent FTSE 100 sell-off. But now might be the time for me to…

Read more »

Investing Articles

11% yield! Could this UK stock  be a huge opportunity for investors targeting a second income?

An double-digit dividend yield could be second-income buying opportunity if the stock market is underestimating this UK translation company. 

Read more »

Group of young friends toasting each other with beers in a pub
Investing Articles

This FTSE 250 REIT’s been unaffected by Trump’s tariffs. And it’s yielding 8.3%

Our writer’s found a FTSE 250 real estate investment trust that hasn’t been caught in the fallout from ‘Liberation Day’.…

Read more »

Middle-aged white man pulling an aggrieved face while looking at a screen
Dividend Shares

Blimey, what’s happened to the Barclays share price?

After hitting a 15-year high at the end of February, the Barclays share price has plunged in the past two…

Read more »

Dividend Shares

On 8.6 times earnings and a cash yield of 9%, this FTSE 250 share seems too cheap

It's been a rough week or so for UK shareholders, with the FTSE 100 and FTSE 250 both plunging. Yet…

Read more »

Smiling senior white man talking through telephone while using laptop at desk.
Investing Articles

Here’s why I just bought this gold stocks fund for my SIPP!

I think investing in gold stocks could be the best way to capitalise on bullion's bull run. Here's a top…

Read more »

Investing Articles

How much passive income an investor could earn if they put £250 a month in an ISA at 40

Harvey Jones shows how small, regular investments can flourish into a generous passive income to secure a comfortable retirement years…

Read more »