I’m building a list of FTSE 100, FTSE 250 and AIM shares I’d like to buy when I next have spare cash to invest. Here are three of my favourites.
Grainger
Residential property stocks such as Grainger (LSE:GRI) can be effective investments when economic conditions worsen. They can expect demand to remain rock-solid, reflecting the essential service they provide.
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To illustrate the point, occupancy at this FTSE 250-listed landlord hit record levels of 98.7% over the summer. That’s even as the domestic economy continued to flounder. In fact, as Britain’s homes supply shortage worsens, I expect habitation levels (and rental growth) to continue marching northwards.
Data from estate agent Hamptons shows that there were 43% fewer rental properties available in the first 10 months of the year than there were in the same 2015 period. This reflects a steady fall in buy-to-let volumes as falling tax relief and rising costs have prompted private landlords to sell up.
This all plays into the hands of Grainger, which record rental growth of 8% (on a like-for-like basis) during the 12 months to September. Despite the undeniable problem of elevated build costs that increases risk, I think this improving momentum makes the company a top buy for next year.
Begbies Traynor Group
UK companies are facing increasing stress as the domestic economy splutters. Latest data from The Insolvency Service showed the number of registered company insolvencies hit 2,315 in October. This was up 18% from the same 2022 period, and also 18% higher than the September total.
I believe purchasing shares in insolvency specialist Begbies Traynor (LSE:BEG) could be a good wealth preserver in this landscape. The business generates around four-fifths of turnover from counter-cyclical or defensive activities.
Despite intense competition, I’m confident that the company will continue to grow profits strongly. Indeed, latest trading information showed revenues and adjusted profit increased by double-digit percentages during the three months to July.
On top of this, Begbies Traynor has a strong balance sheet to help it keep growing earnings through acquisitions. Just this month it completed the purchase of chartered surveyors Andrew Forbes to boost its property advisory division and enhance its geographical profile.
Regulatory changes later down the line could impact earnings growth. But I think things look good for the company right now.
BAE Systems
Defence stocks are classic safe-havens during uncertain times such as these. But the likes of BAE Systems (LSE:BA) are attracting extra attention as the geopolitical landscape gradually fractures.
Conflicts in the Middle East and Eastern Europe are driving demand for weaponry rapidly higher. FTSE-listed BAE Systems has recorded “strong” order intake of around £10bn since the half year, it announced this week. It’s a number that takes new order value in the year to date to a colossal £30bn.
Solid trading here also reflects the company’s leading position across multiple product categories and its wide geographic footprint. I like its top-tier supplier status with the big-spending US and UK militaries. And as a long-term investor, I’m encouraged by its increased sales to fast-growing emerging markets.
Supply chain problems remain a threat across the aerospace sector and could dent the share price. But I feel BAE Systems can continue rising in value following its electrifying price rise so far this year.
