Jon Smith reveals two value stocks that he’s thinking of buying to boost his portfolio performance as we go into the end of the year.
Image source: Getty Images
We’re getting closer to October, marking the beginning of Q4. This also coincides with payday, meaning I should have some free cash with which to buy some stocks. At the moment, I think it’s a smart play to buy some solid value stocks that should help to protect my portfolio against choppy stock market movements. Here are two ideas that I think make complete sense for me to buy.
The first company on my radar is AstraZeneca (LSE:AZN). I’ve never owned the stock, but several of my friends do. With the share price rallying 24% over the past year, it’s easy to see why.
The business has a strong track record of performance, with H1 2022 results being another good period for the business. I like the fact that the pharma giant isn’t overly reliant on one area for revenue. The largest division (oncology) generated 35.5% of total revenue during H1. The other divisions also made a meaningful contribution towards the group level figure. This means it’s less sensitive to a sudden change in the pharma landscape.
Going forward, I think the way it forecasts Covid-19 medicine revenue could be a risk. For the full year, the guidance is that total revenue from Covid-19 medicines is anticipated to be broadly flat versus the previous year. I think this is optimistic. It’s true that we don’t know what the future will bring for the virus, but I’d rather the business err on the conservative side to avoid over-promising and under-delivering.
So why do I think it’s a no-brainer stock to buy now? Healthcare is a sector that shouldn’t be really hampered if the UK economy struggles this winter. It has shown over time that it can generate sticky revenue thanks to the broad client base and necessity of products sold.
Another good stock that I think is appealing is Informa (LSE:INF). The FTSE 100 company has a range of operations, including running events and providing content and research.
One of the reasons why I think the stock is a good buy for me now is due to the fact that we’re over the pandemic slump. This means that people are more comfortable going to in-person events and businesses are happier to spend on marketing and attending such exhibitions. I expect this trend to continue into 2023, so I think now is a good time to jump on the bandwagon.
With the share price up 4.6% in the past year and a price-to-earnings ratio of 32, some might say this isn’t a great value stock pick. However, I’m looking at the longer-term view. The business is still recovering from the financial hit of Covid-19. The share price could rally 50% from current levels and still not be at the levels seen before the March 2020 crash. With interim H1 revenues up 59.1% year on year, there’s clear value (in my opinion) in me buying now if this momentum can carry on.
I do think that the business could specialise in one area, as some of the divisions aren’t that linked together, providing some potential inefficiencies. But as a whole, it’s a stock (along with AstraZeneca) I’m likely to buy for Q4.
Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be considered so you should consider taking independent financial advice.
Jon Smith has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
| Muhammad Cheema
This FTSE 100 stock has seen its shares plunge recently, but is this justified? Let’s take a deeper look to…
Read more »
| Royston Wild
Here’s a handful of REITs I’d buy to make passive income over the long term. They’d give me exposure to…
Read more »
| Jon Smith
Jon Smith explains why he acknowledges the spiral lower in Aston Martin shares but sees some reasons to be optimistic.
Read more »
| Dan Coates
The Wizz Air share price is down over 60% from its peak. Does the company’s aggressive cash flow management make…
Read more »
| Owain Bennallack
Investment trusts may trade at a discount for many reasons – often at once – but it’s mostly centred on…
Read more »
| Edward Sheldon, CFA
Edward Sheldon has been looking at director dealing across the UK stock market. Here’s some notable buying activity.
Read more »
| Kevin Godbold
Next shares remain below their highs, but there’s a decent shareholder dividend and potential for upside surprises.
Read more »
| Roland Head
The National Grid dividend hasn’t been cut in 26 years. Roland Head looks at the latest forecasts and asks if…
Read more »
View All
Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be considered so you should consider taking independent financial advice.
To make the world Smarter, Happier, And Richer
Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show and premium investing services.
Read more about us >
We have taken reasonable steps to ensure that any information provided by The Motley Fool Ltd, is accurate at the time of publishing. Any opinions expressed are the opinions of the authors only. The content provided has not taken into account the particular circumstances of any specific individual or group of individuals and does not constitute personal advice or a personal recommendation. No content should be relied upon as constituting personal advice or a personal recommendation, when making your decisions. If you require any personal advice or recommendations, please speak to an independent qualified financial adviser. No liability is accepted by the author, The Motley Fool Ltd or Richdale Brokers and Financial Services Ltd for any loss or detriment experienced by any individual from any decision, whether consequent to, or in any way related to the content provided by The Motley Fool Ltd; the provision of which is an unregulated activity.
The value of stocks, shares and any dividend income may fall as well as rise and is not guaranteed, so you may get back less than you invested. You should not invest any money you cannot afford to lose, and you should not rely on any dividend income to meet your living expenses. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, administrative costs, withholding taxes and different accounting and reporting standards. They may have other tax implications, and may not provide the same, or any, regulatory protection. Exchange rate charges may adversely affect the value of shares in sterling terms, and you could lose money in sterling even if the stock price rises in the currency of origin. Any performance statistics that do not adjust for exchange rate changes are likely to result in an inaccurate portrayal of real returns for sterling-based investors.
Fool and The Motley Fool are trading names of The Motley Fool Ltd. The Motley Fool Ltd is an appointed representative of Richdale Brokers & Financial Services Ltd who are authorised and regulated by the Financial Conduct Authority (FRN: 422737). In this capacity we are permitted to act as a credit-broker, not a lender, for consumer credit products. We may also publish information, opinion and commentary about consumer credit products, loans, mortgages, insurance, savings and investment products and services, including those of our affiliate partners. We do not provide personal advice and we will not arrange any products on your behalf. Should you require personal advice, you should speak to an independent, qualified financial adviser.
The Motley Fool Ltd. Registered Office: 5 New Street Square, London EC4A 3TW. | Registered in England & Wales. Company No: 3736872. VAT Number: 188035783.
© 1998 – 2022 The Motley Fool. All rights reserved. The Motley Fool, Fool, and the Fool logo are registered trademarks of The Motley Fool Holdings Inc.
