It’s hard enough deciding the best shares to buy at the best of times. And it’s been even harder throughout most of 2020. I’m examining three today that have rebounded in November, and I’ll pick the one share I’d buy now.
November champion
My first selection is one of November’s champions. It’s Cineworld (LSE: CINE), whose share price has rocketed 125% in the month. That’s clearly on the back of recent successes from Covid-19 vaccine trials. A successful vaccine seems to be about the only thing that could get people flocking back to cinemas.
Do I rate Cineworld among the best shares to buy now? First, I need perspective. November might have been a cracking month for Cineworld shareholders, but the price is still down nearly 75% since the start of the year. I think it will be a good few months yet before cinemas are allowed to reopen, and I suspect many people will still be wary for a while after that.
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Meanwhile, new deals being cut with movie makers are less favourable for cinema chains. They’re making new films increasingly likely to transfer to streaming services more quickly than ever. No, Cineworld is not my best share to buy.
Getting back to flying
Next, I’m turning to another ‘bums on seats’ company. This time it’s budget airline easyJet (LSE: EZJ), up 65% in November. That’s not as big a leap as Cineworld, but then easyJet shares haven’t suffered as badly. The easyJet price is down 40% in 2020 and, with hindsight, wasn’t the best share to buy at the start of 2020.
I think easyJet’s in a better position, as there really is no competition for airline travel when it comes to any kind of distance. I suspect passenger levels won’t get back to pre-pandemic levels for some time after covid subsides. The aviation industry, though, clearly has a long-term future.
But airlines have never been among my best shares to buy. In fact, I’ve always had them on my worst-shares-to-buy list, as they’ve little differentiation other than price and are hostage to too many external factors. I wouldn’t buy easyJet.
My best share to buy now
My pick is Hammerson (LSE: HMSO), which I admit is more than a little contrarian, and risky. Why? Well, Hammerson is a real estate investment trust (REIT), with significant interests in shopping centres and retail parks. Am I crazy? Maybe.
Hammerson has risen the least of the three in November, at just 32%. And it’s the hardest hit in 2020, down a whopping 84%. There are plenty of potential downsides too, as my Motley Fool colleague Rupert Hargreaves has insightfully pointed out. But rent collection has started to improve, though the second-wave lockdown will have hampered that. And a new capital raise is certainly possible.
But, with a pandemic solution on the horizon, I think all Hammerson needs to do is survive for a few more months. And I think it will. I definitely wouldn’t rate it as one of the best shares to buy of all time, not by far. But I’m tempted to go for a small investment, with a five-year horizon.
