Last month, I took advantage of the volatility in the stock market to buy three stocks for my portfolio. Here’s a look at the shares I purchased.
The first stock I bought in March was PayPal (NASDAQ: PYPL). I took advantage of the sell-off in the tech sector to add to my holding, buying more shares at a price of $235 per share. After this top-up, PayPal is now the seventh-largest holding in my portfolio.
There are a number of reasons I’m bullish on PayPal. One is that I expect ‘digital wallets’ to take off in the years ahead as the world moves away from cash. As a leader in this space and trusted by millions, PayPal should benefit.
Another is that the company looks set to benefit from the growth of e-commerce. It’s worth pointing out that when retailers offer PayPal as a payment option, conversion rates (sale completions) tend to be much higher. So, I expect to see more retailers embrace it.
PayPal is an expensive stock, even after its recent share price pullback. Its forward-looking price-to-earnings (P/E) ratio is a little over 50. This adds risk to the investment case. If growth slows, the stock is likely to fall. However, I think the long-term growth story here is very attractive.
London Stock Exchange
The second stock I bought was London Stock Exchange (LSE: LSEG). It’s a leading global financial markets infrastructure and data company. It now owns Refinitiv – one of the world’s largest providers of financial markets data. I started a new position here, buying at a price of around 7,300p per share.
In today’s data-driven world, I think London Stock Exchange is well-placed to generate long-term growth. To my mind, the $27bn acquisition of Refinitiv is a game-changer as it enhances the group’s data and analytics offer significantly. That said, LSEG is set to face large costs this year as it integrates the business.
London Stock Exchange shares aren’t cheap. Currently, the stock sports a forward-looking P/E ratio of about 25. This means if the Refinitiv acquisition doesn’t go as planned, or there are other setbacks, the stock could fall.
However, I’m encouraged by the fact that multiple directors have purchased stock recently. This suggests these ‘insiders’ are confident the stock is set to rise.
Finally, I started a new position in IDEXX Laboratories (NASDAQ: IDEXX). This is a US company that specialises in animal diagnostics. I bought some shares for around $480 per share.
There are a few reasons I bought this stock. The first is that I’ve been looking to boost my exposure to the healthcare sector. IDEXX is focused on animal healthcare so it fits the bill.
Secondly, I want exposure to the pet care market as it’s growing at a rapid rate. By 2026, the global veterinary healthcare market is expected to reach $47bn, up from $28bn in 2020. That represents annualised growth of 9%.
IDEXX shares have had a good run over the last year (as pet ownership has increased during the pandemic). So, there’s always a chance the stock could experience a large pullback. Particularly when you consider the stock’s P/E ratio is in the 60s.
Given this risk, I’ve only made this a small position. If the share price falls, it won’t have a big impact on my portfolio.
Edward Sheldon owns shares in PayPal, London Stock Exchange, and IDEXX Laboratories. The Motley Fool UK owns shares of and has recommended PayPal Holdings and recommends the following options: long January 2022 $75 calls on PayPal Holdings. 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.