The Motley Fool

Best stocks to buy now – 1 tech stock I would buy with £1K

Image source: Getty Images

With £1,000 to invest in my portfolio, Learning Technologies Group (LSE:LTG) would likely be the winning tech pick from my list of best stocks to buy now. Here’s why.

Share price rise

LTG was an established e-learning and training provider prior to the pandemic, but now its services are in higher demand than ever. Many employers may never have workers in the office again but training staff remains essential. I am an advocate of tech stocks and have a dedicated section for them on my best-stocks-to-buy-now list. LTG’s position on this list is safe.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

Reviewing its performance on the FTSE AIM, the share price has increased close to 500% in the past five years. This time five years ago, shares were trading for 30p per share. More recently, LTG’s share price passed its pre-crash levels. As I write, I can pick up shares in LTG for 179p per share, which is a post-crash high. On 1 February 2020, shares were trading for 164p. 

Best stocks to buy now perform consistently

In LTG’s most recent full-year results, announced in March for the year ending 31 December 2020, revenues increased by 2% and net income increased 60%. Uptake in its software and platforms increased and the company expanded its footprint in the US and Asia Pacific regions. It also reported a profit of over £13m.

LTG has a proven history of acquisitions, which it then incorporates into its offering. I am usually buoyed by firms that acquire competitors as I see this as a positive sign when I am assessing investment viability. It made three major acquisitions in the fiscal year of 2020.

LTG also reported net cash increased from £3.8m in 2019 to a huge £70.2m in 2020. This propped up a robust balance sheet and LTG maintained its dividend at £0.50 per share.

LTG has continued to perform well for a few years now. Since 2017, revenue and net income have been increasing year on year. Furthermore, cash flow has also been increasing in the same period while liabilities have been decreasing, which is a positive sign.

The majority of my best-stocks-to-buy-now-list consists of firms that have similar performance history over a number of years, and LTG is no different. Past performance is not an indicator of future success. I use it as a gauge when assessing a stock’s investment viability.

Risks and my verdict

I have two main concerns with LTG. First, acquisitions do have the potential to devalue a firm. When an acquisition takes place there is a proportion of goodwill to total assets. This represents the premium paid when acquiring another business. I believe that a large portion of goodwill is a concern. For example, anything above 60% could suggest to me that LTG is paying too much.

Finally, the pandemic is still rife and there are concerns of a third lockdown. Many businesses may need to tighten the purse strings once more if we go into another lockdown and training may not be a priority, which would affect LTG’s bottom line.

Overall, I would still class Learning Technologies Group as one of my best stocks to buy now on my tech stock section. It has performed well recently and historically and its share price continues to climb to reflect positive performance and it also pays a dividend. With £1,000, I would happily invest in LTG.

As well as Learning Technologies Group, check out this top growth share below...

FREE REPORT: Why this £5 stock could be set to surge

Are you on the lookout for UK growth stocks?

If so, get this FREE no-strings report now.

While it’s available: you'll discover what we think is a top growth stock for the decade ahead.

And the performance of this company really is stunning.

In 2019, it returned £150million to shareholders through buybacks and dividends.

We believe its financial position is about as solid as anything we’ve seen.

  • Since 2016, annual revenues increased 31%
  • In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259
  • Operating cash flow is up 47%. (Even its operating margins are rising every year!)

Quite simply, we believe it’s a fantastic Foolish growth pick.

What’s more, it deserves your attention today.

So please don’t wait another moment.

Get the full details on this £5 stock now – while your report is free.

Jabran Khan has no position in any shares mentioned. The Motley Fool UK has recommended Learning Technologies. 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.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.