ISA investing: 3 of the best stocks to buy in May

I’m scouring UK share markets to find some of the best stocks to buy for May. Here are three I’m thinking of adding to my Stocks and Shares ISA.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

It’s clear investors like me need to remain extremely careful before buying UK shares. Okay, prices of British stocks have risen solidly in recent sessions, and the FTSE 100 just burst through 7,000 points again.

But market confidence remains extremely fragile and some of what I consider to be some of the best stocks to buy today could well reverse sharply.

As things stand though, I think the following UK shares are worthy of serious attention today. In fact, I’m considering adding them to my own Stocks and Shares ISA right now.

One of the best FTSE 250 stocks to buy?

The Morgan Sindall Group share price has gone gangbusters in recent sessions, thanks to strong trading updates of its own. In mid-April, it rocketed to then-new record peaks when it said results for the full year would “significantly” beat expectations.

I’m therefore excited to see what the construction and regeneration group will have to say when it gives fresh details on recent performance on Thursday, 6 May.

Last month, the FTSE 250 company said trading has accelerated since the start of the 2021. No UK share is without risk, of course. And remember that the long-term performance of Morgan Sindall could be compromised by the intense competition in its markets. But I still think it’s a top buy for May.

Another top ISA pick?

I also think buying Mears Group could be a good idea before full-year results come out on Wednesday, 12 May. I’m not expecting anything spectacular to come out of this UK share, which is responsible for managing and maintaining tens of thousands of properties for local authorities and housing associations.

Rather, I’m predicting another solid release that could help its share price to take out recent 13-month highs. Last time it updated the market in March, it praised its “resilient trading and liquidity performance” and said it expected “a full recovery as lockdown restrictions are lifted.”

I think this UK share is a great long-term stock to buy today, but remember that profits could start to flag if Mears Group loses key contracts.

M&A delivers big rewards

In its last trading release in April, Diploma announced its performance in the first half of its fiscal year had exceeded expectations.

News that strong trading has continued when it updates the market again on Monday, 17 May, could give its share price a fresh dose of rocket fuel.

The FTSE 250 share has undergone massive transformation in recent years and recent acquisitions are driving excellent revenues growth at the technical products manufacturer.

Indeed, sales were up 27% in the six months to March. Bear in mind though, that while Diploma’s M&A-led growth strategy is currently paying off, past performance on this front is no guarantee of future success.

Companies can often end up overpaying on acquisitions, while trading in bolt-on buys can also end up ultimately disappointing. For the time being though, progress at this UK share looks good.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

More on Investing Articles

Investing Articles

Should I still be cautious about Rolls-Royce shares?

Rolls-Royce shares are flying. But is now the time for this Fool to open a position? Here, he explains why…

Read more »

Group of young friends toasting each other with beers in a pub
Investing Articles

Is the Diageo share price coiled to rebound?

Christopher Ruane explains why he remains bullish about the long-term outlook for the Diageo share price and would happily invest…

Read more »

Young Asian woman holding a cup of takeaway coffee and folders containing paperwork, on her way into the office
Investing Articles

How I could make a 10% yield for high passive income a reality

Jon Smith explains how he can target high passive income from top-yielding stocks, including one specific example he'd consider.

Read more »

Investing Articles

I’d buy 1,784 shares of this FTSE 100 stock to target £350 of monthly passive income

Muhammad Cheema takes a look at how British American Tobacco shares, with a dividend yield of 10.1%, can generate a…

Read more »

White female supervisor working at an oil rig
Investing Articles

1 ex-FTSE 100 stock that I think will get promoted soon

Jon Smith flags up an energy stock that used to be in the FTSE 100 and currently has strong momentum…

Read more »

Shot of a young Black woman doing some paperwork in a modern office
Investing Articles

With an 8% dividend yield, I think this undervalued FTSE stock is a no-brainer buy

With an impressive yield and good track record of payments, Mark David Hartley is considering adding this promising FTSE share…

Read more »

Passive income text with pin graph chart on business table
Investing Articles

£9,500 in savings? Here’s how I’d try to turn that into £1,809 a month of passive income

Investing a relatively small amount into high-yielding stocks and reinvesting the dividends paid can generate significant passive income over time.

Read more »

Businesswoman analyses profitability of working company with digital virtual screen
Investing Articles

Dividend star Legal & General’s share price is still marked down, so should I buy more?

Legal & General’s share price looks very undervalued against its peers. But it pays an 8%+ dividend yield, and has…

Read more »