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I think there are some great opportunities for investors looking to buy stocks right now. If you had £1,000 to invest today, you’d be looking carefully at UK stocks.
The banking sector has understandably been the subject of a lot of investor attention of late. but both FTSE 100 The stocks that stand out to me are in different sectors.
Ashtead Group
Purchase of shares in Ashtead Group (LSE:AHT) at this point may not seem like the best idea. After being one of the best stocks on the FTSE 100 for five years, it fell 15% in March.
Ashtead is an equipment rental business, which makes it highly cyclical. As such, if the UK or US enter a recession, there is a risk that earnings will fall significantly.
This is exaggerated by the company’s high fixed costs, and investors will want to be aware of the company’s increasing debt. So why the hell do I think this is a stock to buy?
Simply put, I’m taking the long view with this one. And when I look beyond the immediate future, I think things are looking very positive.
Over the last five years, Ashtead has increased its revenue by 9% per year. And in the US, where 91% of its revenue comes from, the company has plenty of room to expand further.
The business has also been moving into less cyclical areas. These include facility maintenance, disaster recovery, and portable power.
Ashtead’s business may well be cyclical. But that also means that investor sentiment towards stocks is prone to fluctuations and I see the dip as a buying opportunity.
right movement
The other FTSE 100 stock I would be looking to buy is right movement (LSE:RMV). The company’s shares have been fairly stable recently, but the share price is still 18% below the level of a year ago.
Chart
Rising interest rates could have affected Rightmove’s share price, as any stock could. But there doesn’t seem to be much wrong with the underlying business, in my opinion.
Rightmove’s earnings continue to rise, its share numbers continue to decline, and its market position remains dominant. In addition, it seems to be well protected from the housing market crash.
The biggest problem with stocks is probably that things might not go as they are now. Rightmove just had a CEO change, which is always a source of risk for a business.
Whether Johan Svanstrom can grow the business as effectively as Peter Brooks-Johnson did remains to be seen. And a price-earnings (P/E) ratio of 24 means discounted growth.
In my opinion, Rightmove is one of the strongest companies in the FTSE 100. I own the shares in my portfolio and would look to buy them today despite the high valuation.
Invest £1,000
Exactly how I would look to invest £1,000 today would depend on my portfolio balance. Since I already have a diversified portfolio, I would probably focus on Ashtead with the full £1,000.
However, if I was just starting out with my investments and wanted to build a portfolio from scratch, I would invest £500 in Ashtead and £500 in Rightmove.
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