The deadline for this year’s Stocks and Shares ISA contribution limit is less than a month away at midnight on April 5. That concentrates the mind. Right now, I reckon the FTSE 100 is packed with value, and there are plenty of companies I’d like to add to my portfolio. Like these three.
I’ve had an itch to buy equipment rental firm Ashtead Group (LSE: AHT) for years, without scratching it. It’s been one of the best-performing FTSE 100 stocks of the millennium and its shares are still up 165% over five years. However, they’re down 15% over the last year. Most of the damage was done last week, when they fell 12.13% after a disappointing set of results.
Ashtead generates most of its revenues in the US, where the slowing economy has hit profit expectations. They’re set to grow more slowly, at the lower end of the board’s 11% to 13% target.
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Three portfolio additions
Bizarrely, it’s been hit by a drop in the number of North American hurricanes, wildfires and winter storms, which usually trigger demand for its kit. As a long-term investor, that doesn’t worry me. The emergencies will be back. CEO Brendan Horgan has highlighted “the increasing number of mega projects and recent legislative acts” in the US. They should underpin demand.
Ashtead isn’t notably cheap trading at 16.91 times earnings, and the yield is relatively low at 1.58%. But I’ve been handed an opportunity to buy it at a discount, and it’s about time I did.
Luxury fashion retailer Burberry Group (LSE: BRBY) is another stock I’ve wanted for years, but felt was overpriced. After crashing 50% in a year, that’s no longer the case.
The Burberry share price hasn’t stopped falling yet. It dropped 2.25% last week. Yet I can’t see much point in waiting given the lowly valuation of just 10.51 times earnings. I remember when its shares were valued closer to 25 times.
Burberry has been hit by the global luxury downturn, with sales falling in the US, Europe, India, Middle East and Africa. In other words, most of the world.
Shopping for shares
In January, the board warned operating profits would fall from £634m to between £410m and £460m. Experience has shown me never to buy directly after a profit warning, often there’s another one round the corner. The market has taken time to absorb this one though. I’d like to take advantage before the ISA deadline passes.
Finally, I admire private equity investment firm Intermediate Capital Group (LSE: ICP). It never gets the attention it deserves from private investors. Not that I feel sorry for it. The share price is up 95% over five years and 40% over 12 months.
The stock looks a little pricey trading at 19.91 times earnings, but given recent successes, it could be more expensive. The yield is still decent at 3.98%.
Intermediate Capital Group provides capital for acquisitions, pre-IPO financing and management buyouts. If interest rates stay higher than expected, or we get an economic hard landing, then it could struggle.
It seems to be in a good place though, with funds raised and assets under management both increasing. I’m always wary of buying momentum stocks but it will make a refreshing change to buy a booming company, rather than a struggling one.
