So it’s the new financial year. You can invest up to ÂŁ15,240 in a stocks & shares ISA. After a rocky few months, global stock markets look cheap as chips. I firmly believe that this is a great time to go shopping for shares. But what will you buy?
Here are three shares that you should buy right now.
AstraZeneca
Five years ago, most investors wouldn’t touch pharmaceutical firm AstraZeneca (LSE: AZN) with a bargepole. With several key drugs tumbling down the patent cliff, and a disappointing drugs pipeline, this company’s share price was plumbing the depths. The heyday of Big Pharma looked to be past.
But chief executive Pascal Soriot has turned round the fortunes of this drugs giant. A focus on world-class research, cutting edge biotechnology, and the development of money-spinning anti-cancer treatments have sparked a revival in profits, and the share price. It’s no surprise that Pfizer recently tried to buy AZ. This is one of the pharmaceutical industry’s most prized assets.
Yet the share price is off its highs, and I think there’s more to come from this dividend dynamo. A 2016 P/E ratio of 14.54 and an income of 4.82% look good value.
Volkswagen
The emissions scandal that has hit Volkswagen (XETRA: VOW) over the past year has sent the share price tumbling. Yet my view is this ‘crisis’ is no worse that what carmaking rival Toyota went through just a few years ago and today Toyota is the most successful car firm in the world, its recall scandal already forgotten.
Anyone who has seen the new Audi A4 and the Volkswagen Passat will know that Volkswagen makes some of the best cars in the world. It doesn’t look like a business that’s going down the tubes.
That’s why I think Volkswagen is currently oversold, and is a strong contrarian buy. A P/E of 9.56, with a dividend yield of 3.99%, means this is a bargain that shouldn’t be missed.
Carillion
Carillion (LSE: CLLN) is one of Britain’s leading building and support service firms, and is highly profitable. It’s set to gain as a resurgent Britain invests more in its infrastructure over the coming years.
It made a net profit of ÂŁ139m in 2015, and earnings are set to advance further. Yet this is a business going dirt cheap. The 2016 P/E ratio is 8.37, with a dividend yield of 6.79%.
By any measure, these are enticing numbers, and you should buy Carillion both for growth, and for the dividend.