3 shares I’d buy for after coronavirus

These companies delivered a steady performance last year, despite the pandemic. Roland Head explains these are the shares he’d buy today.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Today, it seems hard to imagine a time when coronavirus won’t dominate the headlines. But history suggests that the pandemic will pass. As an investor, I try to look ahead. Recently I’ve been picking shares to buy that I think will perform when life returns to normal.

Each of the companies I’ve chosen is a mid-sized business with a solid track record. Recent news suggests to me that all three could outperform the market in 2021.

A defensive winner?

Soft drinks group Britvic (LSE: BVIC) has a defensive product and much-loved brands such as J2O, Robinson’s and Fruit Shoot. The firm’s products are an automatic purchase in many situations.

Unfortunately, many of these purchases take place in pubs, restaurants, and cafes. Food and drink outlets have suffered long periods of closure during lockdown. As a result, Britvic’s revenue fell by 7% last year. Underlying profits fell by 22%.

I don’t see these numbers as a big concern. My impression is that Britvic’s management did everything it could to manage the situation. When life returns to normal and the hospitality trade reopens, I expect sales to recover to normal levels.

Britvic shares have fallen by about 15% over the last year. Although the shares rose on vaccine news in November, they’ve since slipped back again. I reckon Britvic looks decent value at the moment, on 14 times forecast earnings, with a 3.5% dividend yield. This is definitely a share I’d buy at the moment.

Profit from tech growth

My next pick is specialist recruitment group SThree (LSE: STEM). Recruiters have suffered during the pandemic as companies cut back on hiring ahead of a possible recession. But SThree’s focus on the so-called STEM sectors — Science, Technology, Engineering and Mathematics — gives me confidence that demand should recover quickly.

Indeed, SThree has already reported improving trading. In November, the company said that trading during the last three months of 2020 was “coming in ahead of expectations”. In December, SThree said that its net fees for the year fell by just 8%, which seems an impressive result to me.

Recruitment is a cyclical business, but SThree has proven to be highly profitable in the past. I expect a good recovery and view this as a growth share I’d buy at current levels.

An emerging market share I’d buy

The final stock I’ve chosen is a company I already own. Asset manager Ashmore Group (LSE: ASHM) is a FTSE 250 firm that specialises in emerging markets. The group is run by founder Mark Coombs, who still owns 31% of Ashmore stock.

I’m a fan of owner-manager companies, as in my experience they’re often run well and with long-term growth in mind. Ashmore was affected by the general turbulence in financial markets last year, but the company’s results for the 12 months to 30 June 2020 showed a modest rise in profits and an operating margin of more than 60%.

The company’s balance sheet remained strong too — Ashmore ended the period with more than £700m of cash on hand. Mr Coombs says that economic forecasts for the year ahead suggest that growth in emerging markets will be higher than in the developed world. This could create opportunities for Ashmore.

Although Ashmore’s share price has risen since I bought the stock, the shares still yield almost 4%. I think further growth is likely and plan to buy more.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Roland Head owns shares of Ashmore Group. The Motley Fool UK has recommended Britvic. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

US Stock

The Nvidia share price falls! Here’s what I think happens next for the S&P 500

Jon Smith reviews the overnight results from Nvidia and explains why this could stall the S&P 500 performance through to…

Read more »

Investing Articles

Down 15% today, is this FTSE 100 share too cheap for me to miss?

JD Sports' share price has tanked after the FTSE 100 share released another profit warning. Is this the opportunity I've…

Read more »

Investing Articles

Up 8% today, is this FTSE 100 growth stock a slam-dunk buy for me?

Halma's share price is soaring thanks to another headline-grabbing trading update. Is the FTSE 100 stock now too good for…

Read more »

Investing Articles

With a P/E ratio of just 10.5 is now a brilliant time to buy a cut-price FTSE 250 tracker?

Harvey Jones says a recent dip in the FTSE 250 leaves the index trading at bargain levels. One stock in…

Read more »

Warren Buffett at a Berkshire Hathaway AGM
Investing Articles

To build a passive income flow, I’d follow this Warren Buffett approach

Warren Buffett has set up passive income streams most people can only dream about. Our writer sees some practical lessons…

Read more »

Growth Shares

As the boohoo share price falls, could it become a penny stock in 2025?

Jon Smith outlines some of the recent problems involving the boohoo share price and considers if things could get even…

Read more »

Young Asian woman with head in hands at her desk
Investing Articles

Here are the worst-performing FTSE 100 shares over the last 5 years

These five FTSE 100 shares have been complete duds over the last half decade. But is there potential for a…

Read more »

Investing Articles

Nvidia stock has tripled this year! Can it keep rising?

Nvidia's latest sales update showed strong growth and the stock's been on a tear so far in 2024. So is…

Read more »