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The best shares to buy now: 2 FTSE 100 stocks I’ve been buying

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I believe investors don’t need too look far to find the best shares to buy now. In fact, I’ve been finding what I believe to be undervalued investments in the FTSE 100 recently.

Here are two of them I’ve been adding to my portfolio. 

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My picks of the best shares to buy now 

At the top of my list is the consumer goods giant Unilever (LSE: ULVR). Shares in this company fell heavily after it released its full-year figures two weeks ago. Despite reporting an increase in sales for 2020, and reinstating growth targets, the market sold the stock. 

The FTSE 100 company is targeting annual sales growth of between 3% and 5%. It intends to achieve this through a combination of organic growth, reinvesting in its existing brands, and acquisitions.

However, despite management’s optimistic growth outlook, the company is facing challenges. One of these is increasing costs. These increased last year and squeezed Unilever’s margins.

Investors seem to be worried that this trend could continue. That may impact Unilever’s bottom line. Some analysts have also expressed concern the group may lose out to smaller, more innovative peers. That’s always a risk the business faces. It’s something management has been able to deal with until this point, which gives me confidence about the future. 

Overall, while Unilever faces challenges, I think this is one of the best shares to buy now after recent declines. If management can hit its ambitious growth targets, I think the company could prove to be an attractive investment. With more than 50% of the group’s sales coming from emerging markets, I think it’s also an excellent way to gain access to these fast-growing economies. 

FTSE 100 stocks on offer

Another company I’ve been buying recently for my portfolio is Reckitt Benckiser (LSE: RB). This firm, which specialises in cleaning products and consumer healthcare, has seen sales jump over the past few months. High demand for cleaning products in the pandemic has more than offset a slowdown in other parts of the business. 

This growth is unlikely to last forever. As such, Reckitt’s future success will depend on management’s ability to deploy excess profits generated over the past 12 months into new growth initiatives. On this topic, management is planning to increase research and development spending, as well as marketing spend. These may be enough to maintain Reckitt’s expansion over the next few years. That’s why I’ve picked this out as one of the best shares to buy now. 

That said, this FTSE 100 company isn’t without its challenges. Like Unilever, rising costs and smaller competitors may threaten Reckitt’s growth rate. These are challenges every business faces. However, Reckitt is particularly susceptible because the business earns high profit margins. This may attract competitors into the group’s market, making it harder for the consumer goods giant. 

Nevertheless, I think the company is well equipped to deal with these challenges. That’s why I believe this FTSE 100 firm is one of the best shares to buy now. 

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Rupert Hargreaves owns shares in Unilever and Reckitt Benckiser. The Motley Fool UK has recommended Unilever. 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.

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