We asked our freelance writers to share the best British shares they’d buy this February. Here’s what they chose:
Paul Summers: Howden Joinery
Buying great stocks for the long term is the Foolish way, and I think kitchen supplier Howden Joinery (LSE: HWDN) is an ideal candidate for me.
The company’s value has fallen back in 2022 so far and now offers an attractive entry point, considering its fat margins and strong brand. Next month’s FY21 results shouldn’t contain any nasties either. Pre-tax profit was already expected to be “at the top end of analyst forecasts” when Howden last reported in November.
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A P/E of 17 looks fair for such a quality business, even if trading could moderate slightly this year.
Paul Summers has no position in Howden Joinery
Royston Wild: Airtel Africa
With fresh financials around the corner, I think now could be a great time for me to buy Airtel Africa (LSE: AAF) shares. Results for the nine months to December are scheduled for Friday 4 February.
A blend of low telecoms product penetration and soaring incomes in Airtel’s emerging markets is supercharging revenues. Indeed, latest trading news showed sales jump 27.6% between April and September. I’m expecting another blowout release in the coming days.
Airtel Africa’s share price has risen 93% over the past year, helped by a string of exceptional trading updates. Yet the telecoms business still trades on a forward PEG ratio well below the bargain benchmark of 1. I think it could be one of the best value shares for me to buy in February.
Royston Wild does not own shares in Airtel Africa.
Alan Oscroft: Unilever
Unilever (LSE: ULVR) hit the headlines in January with its failed £50bn bid for GlaxoSmithKline’s consumer products business. The share price fell, amid criticism from Terry Smith of Fundsmith, over the company’s record of mediocre returns.
Meanwhile, American activist investor Nelson Peltz has taken a stake. He has a history of triggering reforms at underperforming business, so can he do the same at Unilever? The company has already announced big cuts in its workforce.
A clash between investors and board could make this a risky and volatile period to invest in Unilever. For me, it’s a risk worth taking.
Alan Oscroft owns shares in Unilever
Andrew Mackie: Shell
I’m tipping shares in Shell (LSE: RDSB) as a top pick for me in February. The opportunity for oil and gas is potentially the best we have seen since the oil embargo of the 1970s. Years of under investment in the natural resources sector is coming home to roost. Software might be eating the world, but you can’t live on it!
Rising inflation is the catalyst for Shell’s near-term growth potential. Investors are waking up to the fact that fundamentals do matter, after all. Shell is making money hand over fist and paying down its debt.
In addition, it has set aside $7bn to accelerate share buy backs, thereby reducing the company’s dividend burden.
Andrew Mackie owns shares in Shell.
Rupert Hargreaves: Sage
Sage (LSE: SGE) is in the process of shifting from a software to a cloud-based subscription model. This process is taking longer and costing more than expected. If these challenges persist, the company’s profits could come under pressure.
Even though it is encountering some bumps in the road, I think this is the right decision. The subscription model should yield a more predictable and repeatable income stream for the firm in the long run.
As such, I would buy Sage for my portfolio today.
Rupert Hargreaves does not own shares in Sage.
Zaven Boyrazian: Greggs
Greggs’ (LSE:GRG) shares have taken quite a tumble in the last few weeks. But despite this downward momentum, the food-on-the-go retailer continues to deliver impressive results.
The latest trading update did show a 3.3% drop in its two-year like-for-like sales. However, overall, revenue in 2021 still jumped by over 50% to £1.23bn — that’s even higher than pre-pandemic levels!
Supply chain disruptions and labour shortages continue to plague the economy. Greggs is obviously not immune to these disruptions. But given they are only short-term problems, I think the recent drop in price is an excellent buying opportunity for my portfolio.
Zaven Boyrazian does not own shares in Greggs.
Niki Jerath: Fuller, Smith & Turner
It’s been a bumpy couple of years for pub and hotel group Fuller, Smith & Turner (LSE: FSTA); however, I think that from February trading should improve.
As Covid restrictions are loosened, I expect office workers to return to the cities as well as an increase in tourism. Both of these should be positive for the firm.
Though the stock is currently down 9% for the year, a recent positive trading statement from the company has already caused an uplift. While nothing is certain in investing, as the UK heads back to normality, I expect an increase in the share price in February.
Niki Jerath does not own shares in Fuller Smith & Turner
Edward Sheldon: Experian
My top stock for February is credit data provider Experian (LSE: EXPN). Its share price has fallen during the recent tech sell-off and I think the FTSE 100 stock now offers a lot of value.
Experian recently posted a very solid trading update for the three-month period ended 31 December. For the period, revenue growth came in at 14%. Meanwhile, the group advised that it expects top-line growth of 16-17% for the year ending 31 March 2022. These numbers suggest that the company has momentum at present.
Of course, if tech stocks keep falling, Experian could underperform. However, with the stock now trading on a forward-looking P/E ratio of about 28, I think it looks attractive.
Edward Sheldon owns shares in Experian.
Roland Head: CMC Markets
Online financial trading group CMC Markets (LSE: CMCX) is my pick for February. I believe shares in the firm are likely to be undervalued at current levels, especially given plans to spin out the company’s UK stockbroking unit into a new company.
CMC shares have fallen by more than 40% over the last year as the pandemic trading boom has cooled. There’s a risk that profits will disappoint again, but I think that’s unlikely.
The stock currently trades on 10 times 2022/23 earnings and offer a forecast dividend yield of 5%. I’d be happy to buy CMC at this level.
Roland Head has no position in CMC Markets.
Andrew Woods: Hochschild Mining
Hochschild Mining (LSE:HOC), a stock that mines gold and silver, has endured a torrid past year in terms of its share price. In this time, it is down 45%. Of course, the stock is vulnerable to the movements of the underlying commodities to which it is exposed.
There are some reasons to be cheerful about Hochschild, though. With a much-improved cash position and its imminent acquisition of Amarillo Gold, the company is demonstrating controlled expansion.
With the silver price dipping below $23 per ounce, I think these shares could be a good buy for February.
Andrew Woods does not own shares in Hochschild Mining.
Christopher Ruane: boohoo
It has been a challenging time for the online retailer boohoo (LSE: BOO). Investors have worried about criticisms of working conditions in the company’s supply chain. A longer-term financial challenge is increased supply chain costs, which threaten profitability.
I think the risks are already factored into the boohoo share price, which has crashed 70% over the past year. The company continues to grow revenues strongly. I believe it can address its rising supply chain costs. At its current price, I would consider buying boohoo for my portfolio.
Christopher Ruane does not own shares in boohoo.
Andy Ross: Polymetal International
The highly probable ongoing rotation into value shares, and away from US and UK speculative and highly valued shares, makes me think that a high-quality cheap stock such as Polymetal International (LSE: POLY) could be a winner in February.
With a P/E of six, the shares are undoubtedly very cheap. There are only a small number of other FTSE 350 companies with valuations at such a low level.
It is a bit of a contrarian buy. Momentum investors won’t like the chart, but for long-term investors, it has good mining assets and makes a lot of cash. A rotation towards value could reverse the fortunes of the share price.
Andy Ross does not own shares in Polymetal International.
