Investors often overlook the FTSE 100 when searching for the best shares to buy now. I think this is a mistake. The UK’s leading blue-chip index is packed full of high-quality companies. I think some of these enterprises may perform better than their peers as the global economy starts to rebuild from the pandemic.
A good example of the types of businesses I’d back as we emerge from the pandemic is Rio Tinto. This mining giant is the largest producer of iron ore in the world. A building boom sparked by the pandemic has sent the demand for ore surging, which has pushed prices to record highs. Rio profits have boomed as a result, and the firm recently announced a record shareholder dividend.
One of the best shares to buy now
Unfortunately, one big risk of investing in commodity companies is the fact that prices can be volatile. As such, as well as buying Rio for my portfolio of FTSE 100 shares, I’d also buy Glencore.
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The reasons why is simple. It offers diversification. Glencore trades and produces a range of commodities. From oil to coal, wheat and rare earths. The company is one of the many commodity traders in the world. As such, I think the firm should be able to ride the economic expansion, no matter which commodities see the highest levels of demand.
That said, this stock might not be suitable for all investors. It has poor ESG (Environmental, Social, and Corporate Governance) credentials, as Glencore’s a major coal producer. And it’s expanding its coal business as well. The group recently agreed to buy out its peers at the Cerrejón coal mine in Colombia.
Resource stocks aren’t the only FTSE 100 firms on my list of the best shares to buy now.
FTSE 100 travel stock
I’d also buy InterContinenal Hotels Group. The pandemic winded the owner of brands such as Holiday Inn and Crowne Plaza, but it’s staging a comeback. First-half operating profit totalled $188m and pre-tax profits rose to $67m from a $275m loss in the same half last year.
Now the firm’s back in the black, it can focus on its recovery. As the global economy begins to open up again, the group should be able to capitalise on the rebound in travel.
The one risk to watch out for is another series of economic lockdowns, which could set the recovery back months, or even years.
IHG is my favourite travel recovery stock in the FTSE 100.
Building boom
Another sector I’d focus on in the recovery is the building market. With that in mind, I think Ferguson is one of the best shares to buy now in the FTSE 100.
The distributor of plumbing and heating products to professional contractors in North America is riding the region’s building boom. For the three months ended April 30, it reported revenue growth of 24.5%, including 20.1% organic growth in the US. Management reckons sales will continue to expand at a similar rate for the rest of its fiscal year.
With further growth on the cards, I’d buy this FTSE 100 stock right now, although management’s outlook is only a projection at this stage. Rising costs could also put customers off buying, which would weigh on growth for the rest of the year.
