What’s the best stock for me to buy in today’s market?

In a stock market concerned with political unrest, economic uncertainty, and artificial intelligence, Stephen Wright has a relatively uncomplicated idea.

| 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.

Man writing 'now' having crossed out 'later', 'tomorrow' and 'next week'

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.

The stock market is in a tricky place right now. Valuations have been rising and predicting what 2025 will bring in terms of geopolitics, inflation, and artificial intelligence (AI) isn’t easy. 

Despite this, I don’t want to keep money in cash with interest rates continuing to fall. So I’m looking for opportunities that aren’t based on specific general forecasts for next year. 

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

See the 6 stocks

A confusing stock market

There are a few interesting themes in the stock market at the moment. One is a general mood of optimism in the US compared to the UK – and there are good reasons for this. 

While the US looks set to lower taxes and reduce regulation, the UK seems to be going the other way (with the exception of banking). Which move is the right one remains to be seen.

There’s also geopolitical uncertainty right now. Whether it’s the conflict between Russia and Ukraine or in the Middle East, there’s a lot of potential for things to get either better or worse.

This could have a big effect on oil prices, which significantly influence costs for a lot of firms. And making predictions about how this will go seems very difficult. 

Lastly, there’s AI. The big winners in terms of sales growth have been Nvidia and Palantir – companies with legitimate AI products ready to deploy, rather than just optimistic predictions.

The AI revolution looks genuinely important and I expect whatever the next business to launch a breakthrough product is to do well. But I’m not sure I can forecast exactly who that is yet.

Finding stocks to buy

At times like this, I look for the most undervalued stocks I can find. Not because they can’t go down (they definitely can) but because their value doesn’t depend on a difficult prediction.

DCC (LSE:DCC) consists of an energy unit making £503m in operating profit, a healthcare arm generating £88m, and a technology division earning £92m. The firm has a market cap of £5.6bn.

Source: Company Overview November 2024

That looks cheap to me, but stocks can trade at depressed multiples for a long time. But DCC is looking to realise some of the value by divesting its healthcare and technology units.

The risk is that they might not be able to do this. Selling off those divisions depends on finding a buyer willing to offer a decent price for them, which isn’t guaranteed by any means. 

I don’t think DCC needs to do much to generate a good deal though. With the energy business growing at 7% per year, it might be worth the market cap by itself. 

With its balance sheet in good shape, the company is looking to return the cash raised by the divestitures to shareholders. That means there could well be a substantial dividend on the way.

Is it my best option?

Is DCC going to be the stock that generates the biggest return from this point on? Almost certainly not, but it does have one big advantage over other opportunities at the moment. 

The investment thesis for DCC doesn’t depend on any complicated prediction about economics, politics, or technology. It just comes down to the firm’s assets and its plan to unlock value.

I think that makes it attractive. Once I’ve got cash together, I plan to make it the next addition to my portfolio.

But this isn’t the only opportunity that’s caught my attention this week. Here are:

5 Shares for the Future of Energy

Investors who don’t own energy shares need to see this now.

Because Mark Rogers — The Motley Fool UK’s Director of Investing — sees 2 key reasons why energy is set to soar.

While sanctions slam Russian supplies, nations are also racing to achieve net zero emissions, he says. Mark believes 5 companies in particular are poised for spectacular profits.

Open this new report5 Shares for the Future of Energy — and discover:

  • Britain’s Energy Fort Knox, now controlling 30% of UK energy storage
  • How to potentially get paid by the weather
  • Electric Vehicles’ secret backdoor opportunity
  • One dead simple stock for the new nuclear boom

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.

Stephen Wright has no position in any of the shares mentioned. The Motley Fool UK has recommended Nvidia. 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.

Our best passive income stock ideas

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

Investing For Beginners

Why the FTSE 250 could outperform the FTSE 100 for the rest of the year

Jon Smith explains why the FTSE 250 could do better than its big brother when factoring in domestic exposure and…

Read more »

Three signposts pointing in different directions, with 'Buy' 'Sell' and 'Hold' on
Investing Articles

Tariff fears send the Lloyds share price tumbling, but the dividend yield is climbing

Just when the Lloyds Banking Group share price had been rising steadily, along comes a global upheaval to knock it…

Read more »

Bus waiting in front of the London Stock Exchange on a sunny day.
Investing Articles

Here’s how a stock market crash could help an investor retire years early

A stock market crash can be alarming -- but for the well-prepared investor, it can also be an exceptional opportunity…

Read more »

Investing Articles

1 key fact to remember in this stock market correction

This writer takes a look at a FTSE 100 investment trust that is catching his eye after the recent massive…

Read more »

Investing Articles

I was wrong about the Tesla stock price!

Tesla stock's been affected more than most by ‘Liberation Day’. But our writer has other concerns about Elon Musk’s company.

Read more »

Investing Articles

What’s happening to the Rolls-Royce share price now?

The Rolls-Royce share price has taken a knock from US trade tariffs, but it's still gained more than 50% in…

Read more »

Investing Articles

10 UK shares that are 50% or more off their 52-week highs

These UK shares have been hit hard. And Edward Sheldon believes there could be some opportunities for those with a…

Read more »

Man smiling and working on laptop
Investing Articles

Could IAG’s share price surge over the next year? These analysts think so!

IAG's share price has sunk, reflecting growing concerns over the impact of trade wars on airline profits. Is this a…

Read more »