The coronavirus pandemic has seen shares in Hastings Group (LSE: HSTG) lose 6% of their value. It’s fought back mightily in more recent weeks but remains down since mid-February. I think this is a brilliant buy for investors thinking of how to use their new £20,000 annual ISA allowance.
I find Hastings’s fall something of a surprise. Sure, investor mentality still remains a whisker away from regressing back into full panic mode. But insurance companies tend to perform more resiliently in tough economic times. Secondly, its motor insurance rival Admiral’s share price is up by mid single-digit percentages over the same period. This is also despite Hastings not having exposure to dangerous products like travel, for example.
And lastly, Hastings’ earnings multiples and dividend yields are quite compelling at current prices. Its forward price-to-earnings ratio sits at just 12 times while it carries a chunky 6% payout yield for 2020, too. I’d happily buy this FTSE 250 share in an ISA right now.
Another magic pick
Bloomsbury Publishing (LSE: BMY) has also slumped in value following the coronavirus outbreak. It’s down by around a third as the closure of bookshops across its territories has damaged revenues.
The small cap generates around four-fifths of its revenue from print books and not even strong e-commerce sales from the likes of Amazon are able to stop Bloomsbury advising that a “substantial” drop in sales could be forthcoming. This is clearly a worry but it has a strong balance sheet to offset the current troubles and is undertaking measures like axing the dividend, cutting discretionary spending, and launching a new share placing to see it through the current crisis.
It’s a fact that Bloomsbury’s long-term profits outlook remains a terrific one. Harry Potter will continue to remain a big money spinner for many, many years to come. The massive investment it has made in the digital academic arena should also pay off handsomely. It might trade on a high forward P/E ratio of 24 times, based on immediate earnings estimates. But I reckon ISA investors can still expect a brilliant return on their capital in the years ahead.
A final ISA bargain
Now Softcat (LSE: SCT) hasn’t suffered as much as those aforementioned shares over the past three months. Its shares are down by 2% following a recent bounceback in buyer interest. But I believe it has much, much further to rise.
This tech giant stands to receive a shot in the arm in a post-coronavirus landscape. Why? Well the likely growth in remote working should drive demand for Softcat’s digital workplace services. Cloud computing is likely to become more important than ever before, improving revenues for its hybrid infrastructure. The FTSE 250 firm can also look forward to sales from its cyber security arm rising, too.
City analysts don’t expect Softcat’s long record of annual profits growth to grind to a halt. This is despite signs that the global economy is already sinking into a painful downturn. It’s a testament to the company’s brilliant technologies and changes we are likely to see in the workplace. I’d happily buy this share in an ISA despite its elevated P/E multiple of 32 times.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Royston Wild has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Amazon. The Motley Fool UK has recommended Admiral Group and Softcat and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. 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.