These quality UK and US shares are all on my Stocks and Shares ISA radar right now. Here’s why I’m thinking of adding them to my shares portfolio today.
Probe ends at this US share
There’s a multitude of ways that share investors like me can get exposure to e-commerce. I myself own shares in big-box logistics and warehousing providers like Clipper Logistics. I also have FTSE 100 packaging giant DS Smith sitting in my shares portfolio right now. I’m thinking of adding Alibaba (NYSE: BABA) to my ISA as a probe into anti-competitive practices has ended.
The Chinese online retailer was hit with a whopping $2.8bn fine over the weekend by regulators in the country. Fortunately though, this was several billion dollars below what could have been slapped on the business. And the US-listed firm believes that this brings an end to the saga. China is the world’s biggest e-retail market and Alibaba the country’s biggest operator in this field. It’s a combination I think could make investors like me gigantic returns in the years ahead. Remember, though, that online retail is becoming more and more competitive, a theme that could derail handsome profits growth at Alibaba in the future.
A UK share on my mind
I’d also buy Associated British Foods (LSE: ABF) shares for my Stocks and Shares ISA today. Trading remains strong across the business. But as a long-term investor, I’m most interested in its Primark low-cost clothing division. Judging from the huge queues outside its British stores as Covid-19 lockdowns eased today, shopper appetite for fast fashion remains as strong as ever. This is a global phenomenon too, which Primark’s operations across Europe and in North America is well placed to exploit.
One fly in the ointment for FTSE 100-listed ABF, however, is the rising importance of sustainability in consumers’ minds. A recent UBS report suggested that ‘throwaway fashion’ specialists could see sales fall up to 30% as shoppers choose to buy fewer garments to reduce their environmental impact. A UK share like ABF therefore may have to invest heavily to change its manufacturing practices and use more eco-friendly materials to stop revenues falling considerably.
Wrestle with this!
I think investing in the fast-growing video games market might prove to be a lucrative idea too. The industry was already the world’s fastest-growing home entertainment segment before Covid-19. And pandemic lockdowns have given growth rates an extra shot in the arm. According to Kantar Worldpanel, a staggering 600,000 households across Germany, France, Italy, Spain and the UK began playing on video games consoles last year.
That doesn’t count the large number of people who started playing recreational software on their PCs either. And it plays into the hands of Sumo Group, a UK share that provides creative development and co-development services for the games industry. Remember, though, that this business has a small client base, and so the loss of one or two contracts can have a significant impact on revenues.
Royston Wild owns shares of Clipper Logistics and DS Smith. The Motley Fool UK owns shares of and has recommended Alibaba Group Holding Ltd. The Motley Fool UK has recommended Associated British Foods, Clipper Logistics, and DS Smith. 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.