Investing alongside you, fellow Foolish investors, here’s a selection of listed companies that some of our contributors have been buying shares in across the past month!
Airtel Africa
What it does: Airtel Africa operates mobile networks and offers digital money services in a range of African markets.
By Christopher Ruane. The strong growth prospects for its digital payment business recently led me to invest in Airtel Africa (LSE: AAF).
With its large user base and powerful position in large African markets, I think the firm is set to benefit from high demand for mobile and data services as well as booming digital payment use. That ought to be excellent for the business, which in the first nine months of the year made a post-tax profit of $523m and generated almost $1.5bn in free cash flow at the operating level.
Net debt of $3.6bn is higher than I would like. I also think there are political risks due to the company’s heavy focus on a few markets in Africa.
However, I think the share price reflects those risks. With Airtel Africa trading on a price-to-earnings ratio of 8, I added it to my portfolio this month.
Christopher Ruane owns shares in Airtel Africa.
Anglo American
What it does: Anglo American is a major producer of various base metals and bulk commodities.
By Andrew Mackie. Over the last month, I have been very active in the stock market, snapping up shares in commodity-related businesses. One company that has sold off hard recently is mining giant Anglo American (LSE: AAL).
Its dividend policy of paying out 40% of underlying earnings is certainly very attractive to me. But it’s not the main reason why I like the stock. Significant macro trends lead me to believe that today’s price represents an absolute bargain.
Among all the talk about the transition to a cleaner, greener economy, what most people fail to appreciate is this will be nothing but a pipe dream unless significant capital investment flows into the mining industry.
Copper is a key metal in our journey to net zero. However, expansionary capex across this industry is heading in the wrong direction. As much as the deficit is talked about, existing prices don’t reflect this reality. In other words, there is no incentive for the likes of Anglo American to bring new supply online.
On top of that, we have increasing urbanisation as well as an emerging trend toward onshoring manufacturing capability to beef up supply chain security. All in all, I believe we are heading into a world of scarcity and that can be nothing but positive for Anglo American.
Andrew Mackie owns shares in Anglo American.
Ergomed
What it does: Ergomed provides specialised services to the pharmaceutical industry, helping companies with their clinical trials.
By Edward Sheldon, CFA. I recently added Ergomed (LSE: ERGO) shares to my portfolio after they fell from near 1,400p to around 1,000p. I see the stock as a good way to get exposure to the healthcare industry.
Ergomed’s recent full-year results showed that the business is performing well right now. Last year, the group generated revenue of £145.3m, up 22.5% year on year. And at the end of 2022, its order book was sitting at a record high £295m.
“As we look ahead to 2023, demand for our services is high,” commented executive chairman Dr Miroslav Reljanović.
One risk here is that Ergomed’s biotech customers could be impacted by tighter financial conditions. This could affect the company’s growth in the short term.
Taking a long-term view, however, I’m confident in the growth story. Over the next decade, the global drug discovery market is projected to grow by around 9% per year.
Edward Sheldon owns shares in Ergomed.
Forterra
What it does: Forterra is a UK brick manufacturer. It makes the London Brick, which features heavily in UK housing stock.
By Stephen Wright. Buying shares in a brick-manufacturing company as the UK property market has been faltering might seem like a strange decision. But I’ve got a plan.
Over the last 12 months, shares in Forterra (LSE:FORT) have fallen almost 20%. As a result, they’re almost back at their pandemic prices.
The immediate future does look choppy for the business, but I think the longer-term outlook is much more promising. So I’ve been looking to seize an opportunity to buy shares now to hold for a long time.
Forterra operates in an industry where demand routinely outstrips supply. As a result, around 20% of the bricks used in UK housebuilding are imported .
The company has been investing in expanding its manufacturing in order to exploit this imbalance. And I think it can do a solid job for some time, which is why I’ve been buying the stock.
Stephen Wright owns shares in Forterra.
Ginkgo Bioworks
What it does: Ginkgo Bioworks operates a platform that designs and genetically engineers microorganisms for a wide range of industries.
By Ben McPoland. I’ve recently been buying shares of Ginkgo Bioworks (NYSE: DNA). This is a Bill Gates-backed stock that’s down 88% in 18 months. It’s still years away from profitability. One share is now $1.32.
So why on earth have I been investing? Well, Ginkgo is a market leader in the revolutionary field of synthetic biology. But it doesn’t develop its own drugs or products. Instead, it operates a state-of-the-art cell engineering ‘Foundry’ for other companies to use. Its customers are from industries as diverse as biopharma, cannabis, food, agriculture and energy.
In that sense, it’s a bit like Amazon Web Services, but for the natural world. Its business model is unique (though admittedly unproven and therefore risky), involving a mix of upfront fees, milestone payments, royalties, and equity stakes in its customers.
Operating at full scale, this could be a wildly profitable enterprise. The applications of engineering biology are almost endless.
Last year’s revenue of $478m was 52% higher than 2021. It has a cash balance of $1.3bn.
Ben McPoland owns shares in Ginkgo Bioworks.
Legal & General Group
What it does: Legal & General offers a wide range of financial services including life insurance, pensions and annuities.
By Royston Wild. Legal and General Group (LSE:LGEN) offers brilliant value from a growth and income perspective. So I decided to open a position in the FTSE 100 insurer following heavy share price weakness in March.
Today its shares trade on a forward price-to-earnings (P/E) ratio of 7.3 times. This is around half the average that FTSE index companies change hands on.
Meanwhile the company’s prospective dividend yield sits at 8.3%, comfortably above the 3.6% blue-chip average.
I’m especially drawn to Legal and General because of its healthy capital position. The business throws out massive amounts of cash, and this gives it the scope to pay big dividends year after year.
Cash generation rose an impressive 14% in 2022 to £1.9bn. And it had a CET1 capital ratio of 236% at the end of last year, an all-time high. The firm’s robust balance sheet also gives it plenty of scope to grow earnings though organic investment and acquisitions.
Royston Wild owns shares in Legal & General Group.
PayPal
What it does: PayPal is one of the largest fintech companies in the world. It’s the leader in the digital wallet space outside of China and hosts over 400m active accounts worldwide.
By John Choong. With the NASDAQ on the verge of entering a new bull market, one would expect growth stocks like PayPal (NASDAQ:PYPL) to start rising too. However, the stock has been lagging behind with a meagre gain of just 1% this year.
Recession fears, competition from Apple, and slowing user growth all have parts to play in PayPal’s depressed valuation. And while those fears are valid, it shouldn’t discount the company’s own potential either. The tech group continues to innovate en masse, which should see user adoption increase along with the ever-growing shift of consumer spending towards e-commerce.
What’s more, management has guided for a rather positive year ahead. Given the firm’s track record of beating estimates, I’ve got a decent amount of confidence that it can deliver another set of excellent results. More importantly, the board continues to manage capital effectively given its healthy debt-to-equity ratio of 53%. Thus, with its valuation multiples sitting near a decade low, I’ve added to my position.
| Metrics | PayPal | Industry Average |
| P/S ratio | 3.1 | 7.9 |
| P/E ratio | 35.3 | 34.3 |
| FP/E ratio | 22.4 | 26.6 |
John Choong has positions in PayPal.
Primary Health Properties
What it does: Primary Health Properties leases 513 facilities to various providers in the UK and Ireland.
By Mark Tovey. Real Estate Investment Trusts have taken a tumble over the last year, with iShares UK Property UCITS ETF down 30%.
I’d be worried about investing in trusts that own blocks of flats, office space or shopping malls in case rent defaults spike.
But because 90% of the rent roll of Primary Health Properties (LSE:PHP) comes from the UK and Irish governments on inflation-indexed leases, I think the default risk is exceptionally low.
The downside is that a shake-up in NHS policy could see local health authorities forced to scrimp on the amount of space they rent, for example.
Regardless, I bought Primary Health Properties shares this month. What tipped the scales for me was the company’s 26 consecutive years of dividend growth.
The dividend yield is 6.2%. If it can maintain its record of growing that payout, my annual return as a percentage of the initial investment could one day climb to double figures.
Mark Tovey has shares in Primary Health Properties.
