Every month, we ask our freelance writers to share their top ideas for shares to buy with investors — here’s what they said for May!
[Just beginning your investing journey? Check out our guide on how to start investing in the UK.]
Barclays
What it does: Barclays serves 48m customers worldwide and has operations in a variety of sectors that include retail and investment banking.
Passive income stocks: our picks
Do you like the idea of dividend income?
The prospect of investing in a company just once, then sitting back and watching as it potentially pays a dividend out over and over?
If you’re excited by the thought of regular passive income payments, as well as the potential for significant growth on your initial investment…
Then we think you’ll want to see this report inside Motley Fool Share Advisor — ‘5 Essential Stocks For Passive Income Seekers’.
What’s more, today we’re giving away one of these stock picks, absolutely free!
By John Choong. Despite recovering by a respectable 15% from its bottom, Barclays (LSE:BARC) share are still 20% off their 2023 highs, as I’m writing. Pair that with the fact that the stock is currently the FTSE 100’s cheapest bank stock and it’s not difficult to see why Barclays has made it onto my list of best British shares to buy in May.
| Metrics | Barclays | Industry Average |
| P/B value | 0.3 | 0.7 |
| P/S ratio | 1.0 | 2.2 |
| FP/S ratio | 0.9 | 1.5 |
| P/E ratio | 4.7 | 9.5 |
| FP/E ratio | 4.9 | 5.9 |
Although its lack of investment banking revenue is expected to weigh down on profits in the short term, I have conviction that the stock will eventually rebound strongly over the coming years when a new bull market forms.
And although many analysts are predicting that growing net interest margins are over, I believe Barclays can still continue growing its profits as impairment charges decline, eased by rate rises coming to an end soon. For those reasons, I’ll be looking to add to my position while Barclays shares trade at cheap multiples.
John Choong has positions in Barclays.
easyJet
What it does: easyJet is a low-cost airline that serves destinations in 37 countries with a core focus on European markets.
By Charlie Carman. easyJet (LSE:EZJ) has struggled in recent years due to the pandemic’s crippling effects on the travel sector. However, there are signs the share price is ready to soar as we approach the crucial summer months.
A recent trading update brimmed with optimism. The company made good progress across several key metrics and anticipates it will exceed current market profit expectations of £260m for FY23.
That forecast is based on high demand levels, despite the group hiking its average summer fare to around £90 from £61 during the six months to the end of March.
easyJet made a loss of £415m over those six months. A long-awaited return to profitability would be very welcome. However, I’m conscious that the airline relies on robust discretionary travel spending notwithstanding the cost-of-living crisis.
That said, easyJet shares look primed for recovery provided all goes to plan — if I had spare cash, I’d buy today.
Charlie Carman has no positions in easyJet.
ITV
What it does: ITV is a broadcaster in the UK and also operates a business producing content for other companies.
By Christopher Ruane. What does the future hold for ITV (LSE: ITV)?
Its traditional television business is likely to shrink, although there could still be large advertising revenues for the firm even in a declining market. On the other hand, the firm’s digital footprint is growing significantly. Last year, its digital advertising and subscription revenues grew 17% and 29% respectively. Total digital revenues topped £400m.
Meanwhile, the studio and production business has strong potential that I think has benefited from an explosion in digital platforms.
Overall, I think that adds up to a recipe for success. But many investors see the growth in digital platforms as a risk to ITV.
With half a billion pounds in pre-tax profit last year, I consider the company’s current market capitalisation of £3.3bn as cheap. I also like the 6% dividend yield. If I have spare cash in coming weeks, I plan to buy more ITV shares for my portfolio.
Christopher Ruane owns shares in ITV.
Rightmove
What it does: Rightmove owns and operates the UK’s largest online property platform for house buying and selling.
By Stephen Wright. The UK housing market has been struggling lately with rising interest rates, but nobody seems to have told Rightmove (LSE:RMV) this. The business seems to be going from strength to strength.
At its last trading update, the company reported growth in its revenue, earnings, and the number of advertisers on its site. All of this has been during a difficult time for the UK housing market.
I’m looking for this to continue in the future as things gradually start to pick up again. The business has a dominant market position that I think means it can continue to grow at a decent rate going forward.
On top of this, Rightmove has been using its cash to buy back its own stock in April. This is reducing the number of shares outstanding, causing the company to be more profitable on a per share basis.
Stephen Wright owns shares in Rightmove.
