Image source: Getty Images
The stock market seems to be shaking off the uncertainty surrounding the banking sector. But I’m looking for bargains while there are still stocks trading at a discount.
It is almost impossible to know what stock prices will do on any given day. But there are three stocks I’m buying right now because I doubt I’ll have a better chance for another 10 years.
fan
The first on my list is fan (LSE: AV.B). But it’s the company’s preferred stock that catches my eye right now, rather than the common stock.
I think this is a relatively predictable investment. Unless something goes drastically wrong with the business, the stock is going to return 8,375 pence in dividends per share every year.
At a price of £1.18, that’s a 7% return. I’m looking to lock that in right now, because I think it offers a decent return with less risk than most stock market investments.
If interest rates rise faster than the market expects, there is a risk that the stock price will fall. But I’m not convinced that’s going to happen.
As a result, I look to take advantage of the returns on offer today, rather than guess into the future. If interest rate increases subside, you may not have a better chance in this case.
Diploma
I also like the look of FTSE 250 stock Diploma (LSE: DPLM). The company is growing rapidly, and I’m not convinced I’ll see it priced any lower than it is now in the next decade.
The stock does not look cheap at today’s prices. Stocks are trading at a price-earnings (P/E) ratio of 35, which means decent returns are contingent on significant growth down the road.
However, I think this is likely to happen. Diploma aims to increase its revenue and profit through organic growth and through acquisitions.
In fact, the company closed on an acquisition earlier this month. And with 700 more deals under consideration, I think the future looks bright here.
That’s why I’m not afraid of the high P/E ratio. I think there is a long way to go before growth slows down. I expect the shares to be worth a lot more by then.
Bank of America
Lastly, I have been buying shares of US listed companies. Bank of America (New York Stock Exchange: BAC). Warren Buffett seems to like the stock and I think it is trading at a good price right now.
In short, I think the bank is in good shape. But the stock market lists it as a troubled business, so it looks like a bargain to me.
I don’t expect another banking crisis in the next 10 years (although I’m not ruling one out). So I don’t count on seeing the stock at these prices again.
The biggest risk to Bank of America stock right now, in my opinion, is the possibility of tighter regulation. That could impede the company’s profitability in the future.
However, I am not convinced that this is likely. Even if tighter regulations are coming, I think they would like to have a bigger impact on the smaller players, rather than Bank of America, and if I’m not mistaken, this is a rare buying opportunity.
var config = {
apiKey: ‘1ed121d592e04642d57912bb369ef696621661a3’,
product: ‘PRO_MULTISITE’,
logConsent: false,
notifyOnce: false,
initialState: ‘NOTIFY’,
position: ‘LEFT’,
theme: ‘DARK’,
layout: ‘SLIDEOUT’,
toggleType: ‘slider’,
iabCMP: false,
closeStyle: ‘button’,
consentCookieExpiry: 90,
subDomains : true,
rejectButton: false,
settingsStyle : ‘button’,
encodeCookie : false,
accessibility: {
accessKey: ‘C’,
highlightFocus: false },
onLoad: function () { // hide Cookie Control recommended settings button.
var recommendedSettingsButton = document.getElementById(‘ccc-recommended-settings’);
if (recommendedSettingsButton) {
recommendedSettingsButton.classList.add(‘hide’);
} },
text: {
title: ‘Privacy Notice’,
intro: ‘This site uses cookies, pixels, and other similar technologies to improve your web site experience and to deliver you personalised ads about our own and third party products and services. Please read more about how we collect and use data about you in this way in our Cookies Statement in our Privacy Policy. You can change your cookie settings in your browser at any time. ‘,
necessaryTitle: ”,
necessaryDescription: ”,
thirdPartyTitle: ‘Warning: Some cookies require your attention’,
thirdPartyDescription: ‘Consent for the following cookies could not be automatically revoked. Please follow the link(s) below to opt out manually.’,
on: ‘On’,
off: ‘Off’,
accept: ‘Accept’,
settings: ‘Cookie Preferences’,
acceptRecommended: ‘Accept Recommended Settings’,
notifyTitle: ‘Privacy Notice’,
notifyDescription: ‘This site uses cookies, pixels, and other similar technologies to improve your web site experience and to deliver you personalised ads about our own and third party products and services. Please read more about how we collect and use data about you in this way in our Cookies Statement in our Privacy Policy. You can change your cookie settings in your browser at any time. ‘,
closeLabel: ‘Save Preferences and Close’,
accessibilityAlert: ‘This site uses cookies to store information. Press accesskey C to learn more about your options.’,
rejectSettings: ‘Reject All’,
reject: ‘Reject’,
},
branding: {
fontColor: ‘#fff’,
fontFamily: ‘Arial,sans-serif’,
fontSizeTitle: ‘1.2em’,
fontSizeHeaders: ‘1em’,
fontSize: ‘1em’,
backgroundColor: ‘#313147’,
toggleText: ‘#fff’,
toggleColor: ‘#2f2f5f’,
toggleBackground: ‘#111125’,
alertText: ‘#fff’,
alertBackground: ‘#111125’,
acceptText: ‘#ffffff’,
acceptBackground: ‘#111125′,
buttonIcon: null,
buttonIconWidth: ’64px’,
buttonIconHeight: ’64px’,
removeIcon: false,
removeAbout: false },
necessaryCookies: ( ‘wordpress_*’,’wordpress_logged_in_*’,’CookieControl’,’PHPSESSID’,’fivc’,’fivs’,’fivp’,’Ookie’,’Fool_subinfo’,’_gads’,’_gid’,’_gat’,’_ga’,’__utma’ ),
optionalCookies: (
{
name: ‘Sharing’,
label: ‘I would like content tailored to my personal preferences.’,
description: ‘We work with advertising partners to show you ads of products and services you may be interested in. You can choose whether or not to have ads delivered in a personalised way by setting this option. You can return to review this setting at any time by clicking the "C" logo in the bottom left corner of any page.’,
cookies: ( ‘_ga’, ‘_gid’, ‘_gat’, ‘__utma’, ‘_gads’ ),
onAccept: function () {
// Add Facebook Pixel
!function(f,b,e,v,n,t,s)
{if(f.fbq)return;n=f.fbq=function(){n.callMethod?
n.callMethod.apply(n,arguments):n.queue.push(arguments)};
if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version=’2.0′;
n.queue=();t=b.createElement(e);t.async=!0;
t.src=v;s=b.getElementsByTagName(e)(0);
s.parentNode.insertBefore(t,s)}(window,document,’script’,
‘https://connect.facebook.net/en_US/fbevents.js’);
fbq(‘init’, ‘901682110316659’);
fbq(‘track’, ‘PageView’);
fbq(‘consent’, ‘grant’);
// End Facebook Pixel
// Enable Google ad personalization
// gtag (‘set’, ‘allow_ad_personalization_signals’, true ) ;
},
onRevoke: function () {
fbq(‘consent’, ‘revoke’);
// Enable Google ad personalization
// gtag (‘set’, ‘allow_ad_personalization_signals’, false ) ;
},
recommendedState: ‘on’,
lawfulBasis: ‘consent’,
},
),
statement: {
description: ”,
name: ”,
url: ‘https://www.fool.co.uk/help/privacy-and-cookie-statement/’,
updated: ”
},
};
CookieControl.load(config);
