The FTSE 100 has now fallen by 18% year-to-date, creating possibly one of the best opportunities to buy shares in recent times. However, with many industries having been severely impacted by the coronavirus outbreak, it pays to buy stocks carefully. It’s difficult to predict which companies will thrive and which will collapse.
For long-term buyers, I think the following companies could be the best FTSE 100 shares to buy and hold now.
On the face of it, Rightmove (LSE: RMV) shares might seem a bit on the expensive side. Currently, the stock is trading with a price-to-earnings ratio of 31, with only a modest decrease in share price of almost 2% year-to-date. However, with its competitive edge against rivals, I think Rightmove shares are still worth investigating further.
In these times, it’s worth remembering Warren Buffett’s number one rule of investing: “never lose money.” It’s sometimes better to pay a premium for a wide margin of safety. FTSE 100 shares with an edge against rivals often perform the best in the index.
Of course, Rightmove has been impacted by the coronavirus outbreak. In its half-year report, released 7 August, the business announced that revenue was down by 34% to £94.8m. Profit declined by 43% to £61.7m.
Although these figures are worrying, potential investors’ concerns might be eased when considering that much of the year-on-year reduction in revenue is due to Rightmove’s generous 75% discount it offered customers between April and June. As things start to slowly turn back to normal, I’d expect Rightmove’s revenue to return to previous levels.
If you’re looking for a house to buy, I imagine the first place you’d look would be Rightmove. This is evidenced by its market share of time on-site at 88%. Most estate agents can’t miss out on the opportunity to list properties on Rightmove.
The best FTSE 100 share to buy now?
Another share worth examining is Auto Trader (LSE: AUTO).
Like Rightmove, I think this is the first place people will look when buying a used car. In my eyes, this competitive edge makes it one of the best FTSE 100 shares to buy.
Unsurprisingly, with the closure of garage forecourts during lockdown, Auto Trader’s share price has dropped by almost 4% year-to-date. This makes its price-to-earnings ratio 25.
Like Rightmove, in light of the coronavirus outbreak, Auto Trader was generous to its retail customers. It held off charging them for advertising during April and May and gave a 25% discount in June.
Traffic to the website has increased lately, with cross-platform audience numbers up by 28% in the first three weeks of June. This might be because commuters are looking at alternatives to public transport.
With its share price on a downward spiral this year, I think now could be one of the best opportunities to buy this FTSE 100 share.
T Sligo has no position in any of the shares mentioned. The Motley Fool UK has recommended Auto Trader and Rightmove. 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.