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The deadline for this year's stocks and Shares ISA contribution limit is less than a month away, at midnight on April 5. That concentrates the mind. Right now, I estimate that FTSE 100 It is packed with value and there are many companies I would like to add to my portfolio. Like these three.
I've been wanting to buy an equipment rental company. Ashtead Group (LSE: AHT) for years, without scratching it. It has been one of the best-performing FTSE 100 shares of the millennium and its shares are still up 165% in five years. However, they are down 15% over the last year. Most of the damage was done last week, when they fell 12.13% after a series of disappointing results.
Ashtead generates most of its revenue in the United States, where the slowing economy has hurt earnings expectations. They are expected to grow more slowly, at the lower end of the council's target of 11% to 13%.
Three additions to the portfolio
Interestingly, it has been affected by a drop in the number of hurricanes, wildfires and winter storms in North America, which typically cause demand for its equipment. As a long-term investor, that doesn't worry me. Emergencies will return. CEO Brendan Horgan has highlighted “the growing number of megaprojects and recent legislative acts” in the US. They should shore up demand.
Ashtead isn't trading notably cheap at 16.91 times earnings, and the yield is a relatively low 1.58%. But I was presented with the opportunity to buy it at a discount and it was about time I did it.
Luxury fashion retailer Burberry Group (LSE: BRBY) is another stock I've wanted for years but felt was overpriced. After falling 50% in one year, that is no longer the case.
Burberry's share price hasn't stopped falling yet. It fell 2.25% last week. However, I don't see much point in waiting given the low valuation of just 10.51 times earnings. I remember when its shares were valued at about 25 times.
Burberry has been hit by the global luxury crisis, with sales falling in the United States, Europe, India, the Middle East and Africa. In other words, most of the world.
In January, the board warned that operating profits would fall from £634m to between £410m and £460m. Experience has shown me that I never buy immediately after a profit warning, there is often another one just around the corner. However, the market has been slow to absorb this. I would like to take advantage before the ISA deadline passes.
Finally, I admire the private equity investment firm. Intermediate capital group (LSE: PIC). It never gets the attention it deserves from private investors. It's not that I feel bad. The share price is up 95% in five years and 40% in 12 months.
The stock looks a little expensive trading at 19.91 times earnings, but given recent successes, it could be more expensive. The yield is still decent: 3.98%.
Intermediate Capital Group provides capital for acquisitions, pre-IPO financing and management buyouts. If interest rates remain higher than expected, or if we have a hard landing in the economy, then things could get tough.
However, it appears to be in a good place, with funds raised and assets under management increasing. I'm always wary of buying momentum stocks, but it will be a refreshing change to buy a booming company, rather than a struggling one.
