The stock market can often be confusing and fast-moving. Different companies can bring growth to my portfolio depending on the circumstances. Given inflation, rising interest rates and surging energy costs, here are my three best stocks to buy now. Why am I attracted to these firms in particular? Let’s take a closer look.
Biffa
Biffa (LSE:BIFF) is a UK-based waste management business that also incorporates recycling operations.
The big news is that Biffa received a £1.36bn takeover offer yesterday. This equates to around 445p per share. With the stock currently trading at 414p, it could well still be trading at a discount.
In a recent trading update for the first 11 months of the 2022 fiscal year, the company reported that revenue had jumped by around one-third, year on year. With results due on 28 June, I will be watching very closely for improvements in both revenue and profit.
Last November, however, investment bank Peel Hunt downgraded the firm to ‘hold’ because of decreasing footfall in one of Biffa’s recent acquisitions, Company Shop Group. As a potential investor, I hope that this segment begins to see greater interest as the world opens up following the pandemic.
Fresnillo
Fresnillo (LSE:FRES) is a Mexico-based silver mining business. It currently trades at 777p. For 2021, the company reported an increase of around 11% in pre-tax profits. This amounted to just over $600m.
Furthermore, revenue also grew by around 11%. Much of this has been caused by the perceived tightening supply of metals following the war in Ukraine. In addition, market volatility has led investors to seek the ‘safe haven’ of precious metals.
The result is that the value of the silver Fresnillo is producing has surged in value. This translates into a higher share price for the company. Given the protracted nature of the conflict in Ukraine, I think this metal trend will continue.
It is possible, however, that any resurgence in the pandemic could grind mining operations to a halt.
Lloyds
Lloyds (LSE:LLOY) is a UK-based banking business. Its products include loans and mortgages. It currently trades at 45.68p at the time of writing.
The Bank of England has already increased interest rates to 1% and further hikes are expected.
Interest rates are important because they largely dictate how much a bank like Lloyds can charge for its services.
Given that rates are probably going to rise in the future, it seems that the company could benefit.
There is also little evidence yet that the housing market is slowing as many housebuilders, like Taylor Wimpey and Persimmon, say that demand is still strong. This could be positive for the bank’s mortgage segment.
There is the risk, however, that inflation and rising energy costs deter potential customers from taking out loans and mortgages. This could be bad news for Lloyds.
Overall, the current market conditions appear to suggest that these three firms may be good purchases at the moment. To that end, I think I will buy shares in all three businesses soon.
