In today’s nervous market, global tensions have pushed a lot of prices down. Now, decent companies trade at what look like bargain levels.

Here are three UK stocks forecast to grow 100% (or more) in the coming 12 months. But can they really deliver?

Pinewood Technologies

Pinewood Technologies is a software firm that sells a dealer-management system to car retailers, helping them run everything from sales to servicing in one place.

The share price is down about 30% over the past year after a planned $763m takeover from Apax fell through, which spooked investors and triggered a big sell-off.

Soon after, Jefferies came out with a bullish Buy rating and a 550p target price, suggesting the broker sees major potential in the firm. That tells me the market shock may have been more about sentiment than business quality.

But if growth slows or car dealers cut tech spending in a downturn, things could go south. I’m not convinced just yet, but I’ll keep an eye on it.

IP Group

IP Group‘s (LSE: IPO) a very different beast. It backs early‑stage science and tech companies and then tries to turn those stakes into long‑term value.

Earnings are up 33% year on year, and the balance sheet looks strong, with around £1bn of assets and only minimal debt. That’s encouraging.

More so, the shares trade on a price‑to‑book (P/B) ratio of just 0.51, so I’d only be paying about half what the assets are worth on paper. On the flip side, the net margin’s deeply negative at -200%, meaning it’s wildly unprofitable.

This isn’t a penny stock but it’s got that speculative high-risk/high-reward energy. There could be a powerful recovery if sentiment towards listed venture capital improves. But if portfolio write‑downs continue, the risk’s significant. For now, I’ll put this one on the back burner.

Trainline

As an online platform that sells train tickets in the UK and across Europe, Trainline‘s (LSE: TRN) probably the most familiar on this list. The business is highly profitable, with a return on equity (ROE) of 27% and earnings up 45% year on year. Those are impressive numbers that should catch the attention of any growth-focused investor.

Yet despite the growth, the shares still look heavily undervalued, with a forward price‑to‑earnings (P/E) ratio of only 8.5. That leaves a lot of room to keep climbing.

Admittedly, the balance sheet’s a bit shaky, with cash flow on the weak side. If travel demand weakens or the economy suffers a downturn, Trainline could be in trouble. Any slump in passenger numbers or regulatory changes are real risks to consider.

But in my opinion, it should be able to keep compounding profits due to its strong competitive position. Of the three on this list, this is definitely one I feel is worth considering. I’m putting it high on my potential Buy list when payday comes at month’s end.

The post Looking for stocks to buy? These 3 are tipped to double in a year appeared first on The Motley Fool UK.

The combined effects of the UK Budget and the US elections have caused something of a panic, leading many shares to plummet.

While this hasn’t been kind to my portfolio, I can’t help but feel the urge to take advantage of the opportunity. As the famous quote goes: “When there’s blood in the streets, buy!”

With that in mind, I’m eyeing up two cheap renewable shares that brokers have tipped as Buys.

IP Group

IP Group (LSE: IPO) invests in innovative companies and guides them on the road to success. It focuses on start-ups in the life sciences, deep tech and ‘cleantech’ sectors, with an emphasis on greener, healthier solutions.

Many of its investments are University-led projects attempting to achieve scientific breakthroughs. By identifying promising projects in early-stage development, it can accelerate growth and turn a profit. But any mistakes can lead to big losses.

One example is ASML Aero, an Australian company building an electric vertical take-off and landing  (eVTOL) aircraft. The company’s hydrogen-powered emission-free Vertiia model made headlines recently for completing its first untethered flight.

An impressive feat no doubt but it’s yet to equate to profit for IP Group. The share price, having dropped over 70% since late 2021, is now near its lowest point in over 10 years. Its net asset value (NAV) fell 9% in the first half of 2024 as a result of tough market conditions. If economic conditions don’t improve, it could keep losing money.

So can it turn around in 2025?

One key metric used to gauge value is the price-to-book (P/B) ratio, showing how cheap the shares are compared to the company’s overall worth. A ratio below one suggests they’re good value and IP Group’s is currently 0.4. That suggests it’s performing far better than the share price gives it credit for.

While I’m impressed, I’m not 100% convinced yet. If its investments keep making headlines, I’d consider buying the stock.

Greencoat UK Wind

Greencoat UK Wind (LSE: UKW) has been on my radar for some time now. I had high hopes for the renewable infrastructure fund but the share price has struggled to make gains this year.

The renewable energy industry continues to face profitability challenges, compounded by geopolitical issues and weakening climate goals.

Greencoat UK Wind’s key focus is offshore and onshore operational wind farms in the UK. It aims to balance attracting investment through dividends while preserving sufficient capital to fund operations.​

The price has crashed since Trump won the US election, likely a result of his vocal anti-green energy opinions. But I suspect it’s a knee-jerk reaction. More pressing risks include costly repairs, limited output due to wind speed and regulatory changes that could reduce government subsidies for green energy.

With a price-to-earnings growth (PEG) ratio of 0.5, it seems to offer good value with decent growth potential. Having declined 17% this year, the share price is now estimated to be undervalued by 36% using a discounted cash flow model.

I’m still bullish on the stock and expect the price to recover, so I plan to buy the shares as soon as they’re available on my brokerage account.

The post The latest stock market dip has handed me a fantastic opportunity to grab some cheap shares in renewables! appeared first on The Motley Fool UK.

I’m looking to add some FTSE 250 growth stocks to my portfolio of blue-chips and IP Group (LSE: IPO) has caught my eye.

IP Group “invests in breakthrough science and innovation companies”, often university-based research-led companies, which it hopes to help nurture into growth and exit at a profit.

Two examples are portfolio holding Accelercomm, which provides decoding for firms involved in 5G communications, and life sciences company Artios, which develops new therapies for dealing with cancer cells.

Can IP Group keep growing at speed?

Investing in cutting-edge early stage companies is always risky, as impressive intellectual property doesn’t always have commercial teeth. Unsurprisingly, the IP Group share price has been volatile. Its shares are on fire right now. They jumped 21.49% over the last month, at a time when the FTSE 250 fell 0.07%. However, they’re down 21.43% over 12 months. Someone who invested three years ago would be sitting on a 70% loss.

There are high potential rewards here, but also above average risks.

Annual results for the year to 31 December 2023 were a mixed bag, as total net asset value shrank 14.4% to £1.19bn. CEO Greg Smith observed that the market for early-stage investing “remained challenging”.

Yet he said IP Group finished the year “in a strong financial position with £227m gross cash”, after some successful fund aising.

It still felt able to launch a £20m share buyback programme, which lifted the share price. Then it retreated as wider sentiment dipped.

So there are cyclical risks here. That’s on top of other risks, such as the obstacle course of passing clinical trials, and the challenge of finding a seller and making a profitable exit.

IP has done well on this front this year, with the sale of Garrison Technology to US-based cybersecurity firm Everfox, while Intelligent Ultrasound Group’s sale of its Clinical AI business to GE HealthCare for £40.5m.

Generating cash for shareholders

First-half exits have brought in more than £43m, beating 2023’s full-year total, and the board celebrated by announcing another £10m buyback on 8 August. That triggered the recent share price spike.

The board is committed to returning more cash whenever the share price discount to net asset value exceeds 20%. Since 2021, it has returned more than £75m to shareholders through dividends and buybacks.

IP Group is an exciting company, operating in a sector with massive potential, as the UK tries to turn itself into a ‘science superpower’. It’s tackling some the world’s biggest challenges, including the energy transition and the digital transformation. Leading co-investors including Bosch Ventures, BP Ventures and Clean Energy Ventures.

So should I buy it? I think this is an exciting opportunity. However, I’m wary of buying a smaller stock on the back of a sudden share price spike. Especially given that this one was triggered by some successful disposals, which tend to be lumpy. I’ll wait a few weeks to see if the share price settles, then I’ll consider buying.

The post After crashing 70% this red-hot FTSE 250 stock is up 20% in a month! Time to buy? appeared first on The Motley Fool UK.

Details of the company

IP Group describes itself as an active investor in university and other research-based companies. It boasts of a proven track record in backing and nurturing science and technology based businesses.

When I look through the largest holdings, I don’t notice any that I know at first glance. However, this isn’t something that worries me. After all, these are meant to be early stage young firms, not household brands.

For example, the largest holding currently is Accelercomm. It provides decoding solutions for firms involved in 5G communications. Another large stake is in Artios. This is a life sciences company that’s focused on developing new therapies for dealing with cancer cells.

I like the broad range of sectors that IP Group invests in. It’s clearly a stock for the future, as it’s at the forefront of cutting edge tech and will benefit from where that goes in coming years.

The recent wobble

The 20% drop over the past month isn’t good. In the past year, the share price is down by 23%. I think the main driver in the recent past has been weak sentiment about the values of the companies in the portfolio.

In theory, the IP Group share price should reflect to some extent the value of the investments that it holds. The results for 2023 showed that the net asset value was £1.19bn, down from £1.38bn in the previous year. The CEO commented that “the market environment for early-stage investing remained challenging in 2023.”

Given that most of the companies that IP Group invests in are private, it’s not quick or easy to buy or sell their shares. This can worry some potential investors, as if a company starts to do badly, IP Group might not be able to sell at a good price.

Look to the long term

The drop last month pushed the stock to 52-week lows. From my perspective, I think the concern is overdone. Valuations on young firms are always going to be volatile. Yet IP Group just needs to nurture one of these in the portfolio on the same track as Nvidia in order to see the share price explode higher.

I think the future is bright based on the fact that IP Group is investing in exactly that — the future. It’s not targeting traditional sectors, but rather rapid-growth areas with high demand. With my long-term investing hat on, I believe the value of the portfolio (and therefore the share price) should be higher than where it is now when I look out over the next couple of years. On that basis, I do think it’s one of the biggest bargains in the FTSE 250 right now and am seriously thinking about adding it to my ISA.

The post Down 20% in a month, is this the biggest bargain in the FTSE 250? appeared first on The Motley Fool UK.

So, why do I think this loss-making British firm could experience Nvidia-like growth? Let’s take a look.

What does it do?

IP Group is a British venture capital company that invests in early-stage technology companies, notably those involved in the development of innovative technologies and solutions. The company supports start-ups and emerging companies providing them with access to capital and expertise to nurture their growth and success.

It has a diverse portfolio of investments across various industries, including several in the field of artificial intelligence (AI). These investments include companies like DeepMatter, Rio AI, and Lumai.

Of course, while innovation is always synonymous with growth, it’s also synonymous with risk. This risk is particularly prevalent in this challenging period for start-ups, characterised by slow economic growth and high borrowing costs.

Investments

IP is a medium-sized company — with a market cap of £593m — and it invests in smaller companies. As such, the share price can be volatile. Over the past 12 months, 30% has been wiped off the value of this publicly-listed venture capitalist. However, if the companies it invests in do well, the potential for share price growth is considerable.

Once-listed DeepMatter is one of its most exciting AI investments. The company develops AI-powered software for the life sciences industry. The software is used to analyse images and data from microscopes, making it easier for scientists to make new discoveries.

Meanwhile, Lumai, a pioneering British deep optics company, is a new addition to the portfolio. It focuses on developing cutting-edge technology for optical computing. Unlike conventional computing methods that rely on electricity, Lumai’s approach leverages light to perform computations.

The company, which has strategic partnerships with institutions such as the Universities of Oxford and Cambridge, has immense potential to revolutionise computing as we know it, resulting in faster, more energy-efficient, and highly secure computers. While it’s very early days for this next-gen AI firm, it received a significant boost in 2020 with a £1.1m UK govt grant.

Hedging

Here’s why I’m looking to invest in IP Group. The thing is, many growth or AI stocks will fail, even if they’re listed. And because I don’t have the financial or research scope of an investment fund, certainly when it comes to privately held companies, it makes sense to hedge my bets and invest in IP Group.

Sure, many of its investments will fail. But it’s investing in a high-potential sector and some will flourish! And if they really flourish, it could send IP Group stock soaring.

The post Missed Nvidia? Could IP Group shares be next? appeared first on The Motley Fool UK.

[Just beginning your investing journey? Check out our guide on how to start investing in the UK.]

Deliveroo

What it does: Deliveroo is one of the UK’s biggest food delivery services. It also has operations in across the world, such as Qatar, the UAE, and Hong Kong.

By John Choong. Having fallen off its highs of £3.86, Deliveroo (LSE:ROO) shares are now trading below £1. Nonetheless, a move back to the pound mark might not be too far away when considering its accelerated growth prospects and better decision-making from management.

Although pulling out of key growth regions such as Australia and the Netherlands didn’t seem like the right move for a growing company, this has allowed Deliveroo to achieve EBITDA profitability this year, much sooner than expected. This is good news for an investor like myself as I’d rather see profits than poor user acquisition.

Consequently, the unicorn company delivered excellent results in its latest trading update, with gross transaction value (GTV), total orders, and GTV per order improving despite gloomy forecasts from analysts who were predicting a blood bath as a result of high inflation impacting discretionary spending. Pair all of that with a strong balance sheet and reasonably cheap price-to-sales multiples, it’s easy to see why I started a position.

John Choong has positions in Deliveroo.

Diploma

What it does: Diploma is a conglomerate made up of businesses focused on specialised industrial distribution.

By Stephen Wright. Most obviously, when it comes to growth shares, I’m looking for something that’s growing and is going to keep doing so. That’s why my growth stock to buy in February is Diploma (LSE:DPLM).

The company released a trading report last month. To me, it seems to indicate continued strong performance. 

Over the last decade, the company has averaged 13% annual revenue growth. And according to its latest update, the top line is currently growing at 30% per year.

As a conglomerate, I’d expect a good amount of Diploma’s growth to come from acquisitions. But the amount of revenue growth from existing businesses was equal to the amount from acquisitions.

The company also also maintained strong operating margins. This indicates that its businesses are resilient even in a difficult macroeconomic environment.

Stephen Wright owns shares in Diploma.

Experian

What it does: Experian is a British technology company that specialises in consumer credit data.

By Edward Sheldon, CFA. Experian (LSE: EXPN) continues to generate solid growth. For the quarter ended 30 December 2022 (Q3 FY2023), the group generated total revenue growth of 7% at constant exchange rates. And looking ahead, it said that it expects to achieve total revenue growth of 8-10% at constant currency for the year ending 31 March 2023, along with “modest” margin accretion.

One reason I’m optimistic about Experian is that its data and analytics can help banks reduce loan losses. In its third-quarter results, the company noted that lender appetite for solutions that help understand loan affordability are increasing. Here in the UK, its ‘decisioning’ revenues were up 15% year on year in Q3.

Now, like a lot of growth shares, Experian has an above-average valuation. Currently, the forward-looking price-to-earnings (P/E) ratio is in the high 20s. I believe it warrants a premium valuation, however, as it’s a high-quality business with a strong economic moat.

Edward Sheldon owns shares in Experian.

Frontier Developments

What it does: Cambridge-based Frontier Developments develops and publishes video games for the interactive entertainment sector.

By Paul Summers. Buying when everyone else is selling can sometimes generate huge profits over the long term. This is why Frontier Developments (LSE: FDEV) is my pick of the growth shares for February.

Things are a bit bleak at Frontier. A profit warning arrived last month following disappointing sales over the Christmas period. Naturally, even the most dedicated gamers are tightening the purse strings at times like this. 

This sticky patch might continue. However, the positives arguably outweigh the negatives. 

Management has set a minimum expectation of revenue coming at “not less than £100m in FY23”. That’s lower than the previous year’s record of £114m but hardly a disaster. Frontier also looks financially solid. 

Having tumbled over 60% in value in the last 12 months, the stock now trades at less than 10 times earnings. That could prove a bargain in time.

Paul Summers has no position in Frontier Developments.

IP Group

What it does: IP Group develops intellectual property-based companies via long-term partnerships with research universities.

By Charlie Carman. IP Group (LSE:IPO) focuses on two sectors. Its life sciences investments total £704.4m and account for 62% of the portfolio. Technology investments make up the remaining 38% at £334m.

Gene sequencing firm Oxford Nanopore Technologies is the company’s largest single position. Admittedly, a substantial haircut in Oxford Nanopore’s valuation since its 2021 flotation has weighed on the IP Group share price.

However, Oxford Nanopore’s recent trading update showed welcome signs of improvement. Full-year 2022 revenues grew across all customer groups.

In addition, IP Group’s cleantech investments look promising. The group owns a 27.5% stake in First Light Fusion, which is developing a new approach to inertial fusion. IP Group estimates the business could double in value to over $1bn by 2025.

Down 35% over 12 months, IP Group shares seem oversold to me. This disruptive company offers shareholders the possibility to benefit from breakthrough technologies with big potential. I’d buy these growth shares.

Charlie Carman does not own shares in IP Group. 

Keywords Studios

What it does: Keywords Studios is the leading technical and creative talent provider to the largest video game studios worldwide.

By Zaven Boyrazian. Investing in the video games industry can be risky. After all, making a game requires a lot of financial resources — and for many studios, a flop can be disastrous.

That’s why Keywords Studios (LSE:KWS) is a far more interesting way to play this space. The company provides technical and creative services to the largest development houses in the world.

Whenever working on a new project, studios often rely on Keywords to supply the crucial talent needed. With a reputation for quality, the demand for Keywords’ services has steadily risen over the years. And the best part is, even if a finished game fails to meet sales expectations, Keywords still get paid.

As per the latest trading update, full-year revenue for 2022 is expected to be 32% higher than a year ago, with pre-tax profits increasing by 28%, well ahead of analyst expectations. While a slowdown in consumer spending might create some indirect short-term headwinds, the long-term potential continues to excite me.

Zaven Boyrazian owns shares in Keywords Studios.

Watches of Switzerland Group 

What it does: Watches of Switzerland is an international retailer of the most prestigious and recognised luxury watch and jewellery brands. 

By G A Chester. The mid-cap FTSE 250 index underperformed the blue-chip FTSE 100 by a wide margin last year. Yet many mid-caps have higher growth potential than the Footsie’s elephants. 

One stock I’m particularly keen on right now is Watches of Switzerland Group (LSE: WOSG). Despite a continuing strong business performance through 2022, its shares fell more than 40% over the year. 

I like the company’s longstanding, collaborative partnerships with top-tier luxury brand owners. These partnerships represent a barrier to new entrants to the market. And I like its growth prospects. It has a leading position in the UK, a growing presence in the US (it’s aiming to be the clear market leader there, too) and opportunities in Europe.  

There’s a risk it may encounter setbacks in its expansion, but I’m encouraged by the continuing good execution of its growth strategy. I’m expecting it to report further progress in a trading update on 9 February. 

G A Chester does not own shares in Watches of Switzerland.

The post Best British growth shares to buy for February appeared first on The Motley Fool UK.

Here’s one cheap growth stock in the FTSE 250 index that I’m considering as a higher-risk play amid the stock market chaos.

Breakthrough potential

IP Group (LSE: IPO) has a unique business model. It specialises in the creation and commercialisation of intellectual property (IP) rights in partnership with leading British and American universities. The IP Group share price has declined 39% in 2022. However, this could present a great opportunity to build a position in a company with big disruptive potential.

The business backs early-stage companies that exploit ground-breaking IP across a range of technologies. For example, its investment in gene sequencing outfit Oxford Nanopore Technologies makes up nearly a third of its portfolio following an IPO on the London Stock Exchange last year.

The Oxford Nanopore share price has fallen 47% since its flotation. Nonetheless, it’s testament to the nature of IP Group’s business — namely that one or two breakthrough investments can significantly lift its portfolio value and result in considerable cash realisation.

The net asset value of its investments according to its latest financial results is £1.7bn. This equates to 167p per share. The IP Group share price trails that significantly at just over 74p, suggesting it’s currently a value investment proposition.

The FY2021 financial results bolster the case for this growth stock being oversold. Post-tax profit increased by 142% to £449.3m. Liquidity is also healthy, evidenced by 33% growth in net cash to £270m. Moreover, investment remains strong. The company poured over £1.1bn into a variety of science-based businesses.

Looking to the future, the company’s portfolio is concentrated in a range of life sciences and green technology businesses. Highlights include companies exploring possible solutions to nuclear fusion, carbon capture, and long-duration battery technology, as well as product developers focusing on ‘virtual touch’ technology to make the digital world more human.

Risks for the shares

The macroeconomic climate isn’t favourable to IP Group. Growth stocks tend to underperform as interest rates rise. With inflation well above its 2% target, it’s likely the Bank of England will continue to hike rates throughout the year and possibly beyond.

The group operates in a sector where data security is paramount. Given the confidential nature of ideas before patent applications are filed, the company is a target for cyber attacks. The growth of state-sponsored hacking to steal technologies is a risk it will potentially have to contend with in the future.

Finally, the company needs to raise significant capital to operate at optimum levels of investment activity and overheads. The impact of a possible recession next year on capital markets could harm the growth prospects for the shares.

Would I buy this FTSE 250 growth stock?

IP Group shares certainly aren’t risk-free. However, at 74p, I like the risk/reward profile.

This is a company brimming with ideas to solve some of the 21st Century’s greatest problems. I’d buy this growth stock as a long-term hold.

The post Down 39%, this FTSE 250 growth stock is a bargain buy! appeared first on The Motley Fool UK.

However, despite an impressive track record – IP Group has played an integral part in the establishment of over 300 companies, with nearly £1bn of its own money directly invested – why is it that the share price of this FTSE 250 company has suffered so much over the past six months?

From a high of over 155p in September 2021, its shares have now fallen to less than 93p at the time of writing, valuing the company at approximately £984m. Notably, this is very close to the cash cost of its investments over the past 20 years, and substantially below its last reported net asset value (NAV) of 135p per share. 

A recent financial update (posted on 13^th January 2022) painted an upbeat picture, with an anticipated FY21 NAV of over 165p, full year’s profits in excess of £425m and a cash buffer of £256m.

At 20 years old, the company is well past the stage of being a new kid on the block, and a look at its regular RNS announcements shows a solid track record of achievement. These include a number of lucrative exits in 2021, as well as the impressive IPO of Oxford Nanopore (“ON”), one of the first companies identified by IP Group for investment back in 2005.

The big question is, therefore, why the slide?

Well, clearly this is something the company’s board don’t understand either. Since the middle of last year, they have dedicated a war chest of some £35m to a continued share buyback scheme. The management clearly believe that there is substantially more value to IP Group than the market is recognising.

Possibly the perception is that IP Group is too heavily reliant on its investment in ON, and it is true that even after a 30% slide in the share price of ON during January, IP Group’s holding in the company is still worth over £250m (or around 25% of the current market cap of IP).

The reality does appear to be different, though. A well-diversified portfolio of over 30 companies has the potential to continue the company’s established track record of development, growth and exits.

Perhaps it is also the lumpy and less-than-transparent nature of these revenue streams that causes investors to shy away. This is maybe the reason that IP Group has started to pay a dividend over the last year to win back confidence. Expect this dividend to grow if full-year profits meet current expectations.

One should not forget as well that IP Group’s activities now include a solid bank of complementary revenue streams, including the separately managed private Venture Capital Fund and the well-respected EIS manager, Parkwalk Advisers (acquired in 2017), with over £400m under management.

I keenly look forward to the release of its final results in March, but in the meantime — since I’m prepared to assume a little risk — there appears to be substantial upside to this misunderstood sleeping giant, and I’m strongly considering buying more of the shares for my own portfolio.

The post There’s more to IP Group than Oxford Nanopore appeared first on The Motley Fool UK.

Early-stage company backer

As a backer of ambitious early stage companies, IP Group (LSE: IPO) has been in the news as Oxford Nanopore Technologies confirmed its intention to proceed with an initial public offering.

This ought to be good news for IP Group shares. Yet they appear to be cheap. The FTSE 250 group’s shares trade on a price-to-earnings ratio (P/E) of eight and a price/earnings-to-growth (PEG) ratio of 1.11. These ratios both suggest the shares could be undervalued. Yet there are reasons to be optimistic as the floating of Oxford Nanopore proves.

IP Group is experienced in backing early-stage companies, but there are inherent dangers in the industry. Such companies can be hit and miss and some could fail. But IP Group has a good track record and with the shares being so cheap, it could be one of the best UK shares to buy now. I’ll certainly consider adding it.

Two more on my buy list

Rathbone Brothers (LSE: RAT) is another FTSE 250 company that could have a bright future. Again it comes up looking cheap with a P/E of 12 and a PEG of 0.7. The asset manager is well established in ESG investing, and as this trend towards environmentally and socially conscious investing grows more popular, that positions it well within the asset management industry. It could bring in a lot more customers.

The decision to grow by bolt-on acquisitions is a new development and investors may well like seeing Rathbones beefing up to grow its market share. It currently has around 3.8% of the UK wealth management market.

As an asset manager it has strong margins, which adds to its investment case and, for me, makes it one of the best shares to buy now. 

Of course, there are reasons the share price might not do well in the future as other asset managers may grow more quickly, the company could make the wrong acquisitions, or overpay for some. 

Yet the potential for improvement in the business means I’m likely to add Rathbone Brothers shares to my portfolio.

Then there’s Sylvania Platinum (LSE: SLP), which strikes me as one of the best shares to buy. I hold the shares already and am keen to add more. Why? First and foremost a falling share price has made these shares cheap. The P/E is three and the PEG is 0.2. For a cash-rich, low-cost producer of platinum group metals (PGMs), including platinum, palladium and rhodium, this is too cheap for me to ignore.

The price of these metals has been falling, which explains the current share price slump and mining is undeniably cyclical and volatile. Yet markets for both palladium and rhodium are forecast to be in deficit this year. The result of this could well be that prices bounce back due to the imbalance between supply and demand.

The share price is volatile and metal prices could keep falling, potentially hurting the share price. But in my opinion, Sylvania Platinum is one of the best UK shares to buy now.

The post 3 of the best shares to buy now appeared first on The Motley Fool UK.

Royston Wild: Angling Direct 

I’m expecting a sunny set of numbers when Angling Direct (LSE: ANG) releases its full-year financials on Tuesday, 11 May. I think the retailer’s share price — which is already up over 120% over the past year at the time of writing — could rise strongly again. 

In its most recent update this penny stock said that it had retained “positive sales momentum,” and that revenues were tipped to have risen 27% in the 12 months to January 2021. Angling Direct has a history of lifting profits guidance in recent times thanks to strong progress on lifting margins and excellent sales via its online channel, too.

Beware, though, that Angling Direct trades on an elevated forward price-to-earnings (P/E) ratio of 50 times. This leaves the UK share in danger of a sharp share price reversal if sales growth shows signs of moderation. 

Royston Wild does not own shares in Angling Direct. 

Rupert Hargreaves: IP

IP (LSE: IPO) develops intellectual property-based businesses like Oxford Nanopore Technologies. IP owns 15% of this business valued at £340m. The ultimate sale price could be significantly lower or higher when it IPOs later in 2020.

I think the best way to look at the business is to consider its book value growth as a measure of wealth creation. Book value has grown at a compound annual rate of 11.3% since 2015. 

As the company gears up for the Oxford float, I think its stock could be worth buying, although if the float flops, IP could be left nursing large losses.

Rupert Hargreaves does not own shares in IP.

Dan Peeke: Diageo

With the hospitality sector reopening, alcoholic drinks company Diageo (LSE:DGE) is my top stock for May.

In short, after months without the pub, Brits are going to treat themselves. Diageo owns an incredible portfolio of premium brands – from Guinness to Tanqueray to Johnnie Walker – that are all going to be in high demand. Its share price had already risen by 10% in the first four publess months of 2021, so with sales increasing, its growth should be even more pronounced.

Of course, there’s always the chance that reopening venues is a disaster that reignites the pandemic and sends Diageo’s sales back down… but I’m feeling confident at the moment.

Dan Peeke owns shares in Diageo.

Paul Summers: Burberry

The share price of luxury firm Burberry (LSE: BRBY) has recovered fairly well over the last year as normality has returned to its key Asian markets. Even so, it’s still 10% below the highs hit in early-2020 (at the time of writing). 

Back in March, the blue-chip company revealed that revenue and adjusted operating profit would now likely be “ahead of consensus expectations”. Should this be confirmed in May and accompanied by a positive outlook statement, I think there’s a good chance we will see this gap close. As the great unlock continues, I’m holding tight to my stock.

Paul Summers owns shares in Burberry.

Harshil Patel: Howden Joinery 

Howden Joinery (LSE:HWDN) is a leading manufacturer and supplier of fitted kitchens. It has steadily grown its earnings over several years and could be well placed to benefit from a rise in homebuying.  

Several schemes and incentives are supporting the UK residential property market. A new government-backed mortgage scheme will help home buyers with just a 5% deposit. Stamp duty incentives are also currently still in place. 

Overall, this quality consumer cyclical stock offers double-digit margins, earnings growth and return on capital. It’s also conservatively financed and trades at an undemanding valuation.  

Harshil Patel does not own shares in Howden Joinery.

Edward Sheldon: JD Sports Fashion

My top stock for May is JD Sports Fashion (LSE: JD).

The reason I like JD is that, right now, many consumers are cashed up after months of lockdown. I think JD could benefit in the months ahead as the global economy reopens and consumers head out to spend their savings. JD could do particularly well in the US (where it now generates over a third of sales) due to the fact that many US citizens have received stimulus cheques.  

JD can be a volatile stock at times, so it’s not going to be suitable for everyone. However, overall, I think the risk/reward proposition here is attractive.

Edward Sheldon owns shares in JD Sports Fashion.

Roland Head: ITV

Television group ITV (LSE: ITV) had a difficult year in 2020. But the group is already reporting an improved outlook for 2021. I expect this recovery to continue.

Although the company continues to face tough competition from big streaming services and the decline of broadcast television, I do not think that ITV’s share price reflects the potential value of its programme production business.

Analysts’ forecasts suggest earnings will rise steadily over the next couple of years. With the stock trading on 11 times 2021 forecast earnings and offering a 4.4% dividend yield, I continue to view ITV as a buy.

Roland Head owns shares in ITV.

Nadia Yaqub: Diageo

Lockdown restrictions are easing and as people start to socialise they are likely to eat and drink out. I think Diageo (LSE: DGE) is well placed to capitalise on this. The beverage company has a diversified portfolio of over 200 brands including Johnnie Walker and Smirnoff.

It derives a significant portion of its revenue from the emerging markets. Here, Diageo’s brands are seen as a symbol of status for the growing affluent class. I think this region has further growth potential. The shares also offer an attractive dividend yield of over 2%, which is covered by earnings.

Nadia Yaqub does not own shares in Diageo.

Kirsteen Mackay: Tate & Lyle 

FTSE 250 stock Tate & Lyle (LSE:TATE) is hoping to sell a controlling stake in its artificial sweeteners division to help streamline the company and futureproof its growth prospects. By retaining a minority stake it won’t entirely lose out if this arm continues to grow its profitability.

This division could potentially sell for £1.2bn, according to the Telegraph. The proceeds would be used to help Tate & Lyle reduce its debt pile and turn its attention to becoming more competitive in its higher margin food and drinks division.

I like the growth potential in this stock and its 3.6% dividend yield. 

Kirsteen owns shares in Tate & Lyle.

Zaven Boyrazian: Saga

Saga (LSE:SAGA) is a travel and insurance business. For years its share price has fallen due to mismanagement.

But in 2020, Saga’s original owner, Sir Roger De Haan, made a sudden return. He injected £100m into the business, replaced the old management team and is now restructuring the entire company.

Based on the most recent results, it looks like the new strategy is working. Advanced cruise bookings for 2021-2023 increased by 20% despite the disruptions from Covid-19. And the insurance division finally started growing again.

There are plenty of risks and challenges ahead. But I believe Saga is capable of making a comeback over the long term. And so, I’m considering adding it to my portfolio while it’s still cheap.

Zaven Boyrazian does not own shares in Saga.

Christopher Ruane: C&C Group

C&C Group (LSE: CCR) is the drinks company that owns famous brands such as Magners and Tennent’s Lager. It has been hit hard by the pandemic.

While supermarket sales have held up well, the pub business has suffered badly. C&C also owns a drinks wholesaler and part of a pub chain. While there is a risk patrons won’t frequent pubs as much as they did before the pandemic, the reopening of many pubs across the UK still bodes well for its prospects in my opinion.

Christopher Ruane owns shares in C&C Group.

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