Investing alongside you, fellow Foolish investors, here’s a selection of stocks that some of our contributors have been buying across the past month!
Apple
What it does: Apple is the world’s largest consumer technology company, with it being most renowned for the iPhone.
By Charlie Keough. I already own shares in Apple (NASDAQ: AAPL), but given the stock’s recent decline, I’ve decided to buy more.
Following the news that Chinese government workers have been banned from using iPhones, the Apple share price slid. However, I saw this as an opportunity.
Warren Buffett once said to invest in companies you understand. And with Apple and its billions of users, the company’s core business model is pretty simple to follow. With that, it’s no surprise the American powerhouse makes up the majority share of Buffett’s Berkshire Hathaway portfolio.
What draws me to Apple is the focus it has begun to place on its noncore products, including paid subscriptions and gadgets such as its VR headset.
I also like Apple’s dividend. And while it’s not massive, it’s most certainly consistent.
It’ll face headwinds in the weeks and months ahead including the potential for further Chinese pressure alongside ongoing inflationary concerns. But given the strength of the brand, I see it coming through the other side. With that, I saw the decline as a chance to buy.
Charlie Keough owns shares in Apple.
Barclays
What it does: Barclays is a UK-focused universal bank with commercial, investment and retail operations.
By Dr James Fox.
Barclays (LSE:BARC) isn’t among the sexiest picks on the FTSE 100, but it makes sense to me. The banking stock trades at just 5.3 times forward earnings and 0.42 times book value, inferring a considerable discount to its net asset value as well as the sector.
The downward pressure on banking stocks has largely been engendered by the continued rise in interest rates. Contrary to popular opinion, the BoE’s base rate has now extended far above optimal levels.
However, it’s entirely possible that we’ve seen the last rate increase after Andrew Bailey’s commentary last week. While we’re yet to see the full impact of the last 18 months of monetary tightening – there could be more pain to come – an end to the cycle would likely be very positive for lenders amid concerns about a slew of defaults.
So, with a normalising economic climate, and phenomenal 58% discount to its tangible net asset value, I’ve been topping up on Barclays shares.
James Fox owns shares in Barclays.
CRH
What it does: CRH produces cement, aggregates and other building materials. The group generates around 75% of its profits in North America.
By Roland Head. FTSE 100-listed CRH (LSE: CRH) is trading strongly at the moment. Pre-tax profit rose by 25% to $1.5bn during the first half of 2023.
Chief executive Albert Manifold expects “significant increases” in US government spending to drive further growth during the second half of this year.
Against this backdrop, the stock’s forecast price-to-earnings ratio of 12 doesn’t seem too expensive to me.
The other reason I invested was a little more speculative. CRH is about to move its primary stock market listing from London to New York.
My research suggests CRH looks a little cheaper than its US-listed rivals. I reckon the shares could benefit from a higher valuation once the US market gets to know this £30bn business.
Of course, I could be wrong. Construction is cyclical and the US economy could slow, leading to a profit slump.
Time will tell. But right now, I think CRH looks interesting.
Roland Head owns shares in CRH.
Kraft Heinz
What it does: Kraft Heinz is multinational food company. Its products include Phildelphia, HP Sauce, and Capri Sun
By Stephen Wright. Shares in Kraft Heinz (NASDAQ:KHC) have been at their 52-week low lately with a dividend yield of around 4.5%. I’ve been using the opportunity to load up in my portfolio.
The business doesn’t really go through the cyclical ups and downs that other industries face. As a result, I think it’s important to seize opportunities when they present themselves.
Inflation is often a risk in this industry and Kraft Heinz isn’t immune to this threat. But the company has a number of advantages when it comes to dealing with cost increases.
First, the company’s size of the company’s operations allow it to explit economies of scale. Second, the strength of its brands help it to pass costs through to consumers.
Essentially, I see Kraft Heinz as a company that has some long-term competitive advantages. These make the short-term weakness in the share price look like a buying opportunity to me.
Stephen Wright owns shares in Kraft Heinz.
Legal & General Group
What it does: Legal & General Group provides wealth, protection and retirement products chiefly in Europe and North America.
By Royston Wild. I first bought Legal & General (LSE:LGEN) stock for my portfolio in the spring. And I added to my position in August after half-year trading numbers sent its share price falling again.
Okay, news of a 2% fall in operating profit over the period wasn’t ideal. Demand for financial services is coming under pressure as the cost-of-living crisis endures.
Yet the long-term outlook for the FTSE 100 stock remains super bright, in my opinion. And as someone who buys shares to hold for several years at least, I think the company could deliver excellent returns in that time.
Uptake of retirement and wealth products is tipped to surge over the next decade as people take post-work financial planning more seriously. Pleasingly, Legal & General’s strong brand power should allow it to make the most of this opportunity.
Today its shares trade on a forward price-to-earnings (P/E) ratio of 9.3 times. They also carry a 9.5% dividend yield. I think it’s a brilliant value stock to buy at current prices.
Royston Wild owns shares in Legal & General.
London Stock Exchange Group
What it does: London Stock Exchange Group is a diversified financial markets infrastructure and data business that operates through three divisions: Data & Analytics, Capital Markets, and Post Trade.
By Edward Sheldon, CFA. London Stock Exchange Group (LSE: LSEG) is a high-quality company, in my view. And I think it’s well placed to generate solid growth in the years ahead.
In its H1 results, which were published in August, the company advised that it has made a “strong start” to its recent partnership with tech giant Microsoft. It noted that its customers will begin to see the benefits next year.
It also said that it is harnessing the power of artificial intelligence (AI) technologies across the business. “Both LSEG and our customers are well positioned to benefit from the rapid developments in AI technologies which will enhance the value of our data, improve customer workflow and drive ongoing efficiencies in our own business,” wrote management in the H1 report.
But it’s not just the growth potential that attracts me here. I also like the capital returns. For H1, the group declared a dividend of 35.7p per share, up 12.6% year on year. Additionally, it said that it expects to buy back up to £750m worth of shares before April 2024.
Now, the valuation here is well above the market average. This adds risk.
Overall, however, I see the long-term risk/reward setup as attractive.
Edward Sheldon owns shares in London Stock Exchange Group and Microsoft.
MongoDB
What it does: MongoDB is a document-oriented cloud database-as-a-service provider that powers big data applications worldwide.
By Zaven Boyrazian. Behind almost every modern data-driven technology lies a database. And while companies like Oracle have long dominated this space, the level of competition is heating up. And MongoDB (NASDAQ:MDB) has been making waves.
The firm provides cloud database storage solutions that use the document-oriented approach rather than the traditional relational table method offered by Oracle. Without going too far into the weeds, this alternative architecture enables developers to read and write unstructured data exceptionally quickly.
That’s critical for technologies like IoT, 5G, and machine learning, where low latency is an absolute must. So, it’s no surprise that demand is on the rise. In fact, the latest earnings report beat analyst expectations by more than double!
Of course, no investment is without risk. Stealing market share from long-established rivals isn’t cheap. And as an unprofitable enterprise, the level of volatility remains elevated even now that markets have started cooling down.
Nevertheless, with losses shrinking, the long-term potential looks explosive in my eyes.
Zaven Boyrazian owns shares in MongoDB.
Smurfit Kappa Group
What it does: Smurfit Kappa Group specialises in manufacturing paper-based packaging and runs a network of paper, recycling and forestry operations, including its own paper mills.
By Harvey Jones. I’ve been on a buying spree this summer filling up a self-invested personal pension (SIPP) and one of the stocks that excited me most was Dublin-based packaging group Smurfit Kappa Group (LSE: SKG).
I thought it was a real dark horse, a lesser-known FTSE 100 stock with terrific growth prospects once the cost-of-living crisis eased and e-commerce resumed in its full corrugated paper glory. It looked cheap, too, trading at around seven times earnings and yielding roughly 4.5%.
Smurfit dipped 10% shortly after I bought it on 10 June and I kicked myself for failing to average down after the stock rebounded just as sharply.
Now I’m glad I didn’t, because the Smurfit Kappa share prices has crashed almost 17% on news that it’s combining with US rival WestRock to make the world’s largest listed packing group worth almost £16bn. It will seek a New York listing, with a standard listing in London.
CEO Tony Smurfit has been working out how to crack the US for years and reckons this will boost earnings per share by more than 20% in the first full year.
Unfortunately, markets disagree. The merger may incur hefty upfront costs before we see those efficiency savings and many fear Smurfit has overpaid at $43.51 per share, a whopping 36% premium to WestRock’s closing price.
I hadn’t banked on these shenanigans when buying the stock but I’m not going to sell and crystallise what I hope is only a short-term loss. I will hold on and hope that Tony Smurfit’s US dream is worth the high price he paid.
Harvey Jones owns shares in Smurfit Kappa
