Right now, I’m not piling a ton of money into the stock market. That’s because, in my view, many areas of the market are quite expensive at present.
Having said that, I’m taking advantage of opportunities when I see them. With that in mind, here’s a look at three stocks I bought for my portfolio last month.
A FTSE 100 reopening stock
The first I bought (more of) was Smith & Nephew (LSE: SN). It’s a leading medical technology company that specialises in joint replacement systems, sports medicine, and advanced wound management. I picked up some shares at 1,380p a pop.
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The reason I bought SN was that I see it as a great ‘reopening’ stock. This company experienced significant challenges last year as elective medical procedures were postponed, due to Covid-19.
However, now that the world’s reopening, business is picking up. Indeed, in a trading statement posted last week, the company said Q1 2021 revenue was up 6.2% on an underlying basis. For the year, it’s targeting top-line growth of 10-13%.
Of course, if the Covid-19 situation deteriorates, SN could experience challenges again. This is a risk to consider. However, I’m not too concerned about short-term setbacks. This is a stock I plan to hold for the long term in order to capitalise on the world’s ageing population.
A gig economy stock
The next stock I bought (more of) was Upwork (NASDAQ: UPWK). It operates the world’s largest freelance employment platform, which I use myself as a freelancer. I bought some more shares at the $44 level.
Regular readers will know I’m a big fan of this stock – it’s one of my largest holdings. The reason I’m so bullish is that I expect the ‘gig economy’ (or ‘talent economy’) to grow significantly in the years ahead as people realise that, due to technology, they no longer need to work 9-to-5 jobs. These days, if you have a skill set, you can market that to companies all over the world and work from anywhere.
Upwork is a more speculative stock. Currently, the company is only generating small profits. The valuation is quite high too (the price-to-sales ratio is 13), which adds risk. I’m comfortable with this risks though. While it’s a larger holding for me, it represents less than 5% of my overall investment portfolio.
A Warren Buffett stock
Finally, I started a position in Visa (NYSE: V), a stock owned by Warren Buffett. It’s the largest payments company in the world. For every $1 spent in physical locations globally, around 15 cents goes through the Visa network. I paid $233 per share for my shares.
I bought this stock for a few reasons. Firstly, I think the US economy is going to boom in the next 12 months (in Q1, GDP grew 6.4%). I see Visa as a good way to capitalise on US consumer spending.
Secondly, I expect Visa to benefit as travel picks up. It generates a large proportion of its revenues from cross-border transactions.
Third, I expect the company to benefit as the world shifts away from cash in the years ahead.
Visa is an expensive stock. Currently, the forward-looking P/E ratio is a little over 40. This adds risk. I’m comfortable with this valuation though. This is a high-quality company that’s very profitable.
