The deadline is fast approaching for UK share investors to max out their ISA allowance for this tax year. Any amounts not used up can’t be rolled over to future years. And so I’m on a hunt for the best shares to buy for my own Stocks and Shares ISA.
Here are several quality UK (and US) shares I’m thinking of buying before 5 April’s ISA deadline.
Looking good
I think ASOS (LSE: ASC) is one of the best e-commerce stocks to buy right now. Changing consumer habits following the Covid-19 crisis and steady technological improvements means online shopping has plenty of room for growth. And this UK share is investing heavily in winning brands to make the most of this opportunity. My colleague Edward Sheldon recently commented that online-only operators who offer a multitude of brands are the big winners with fashion shoppers.
A word of warning though. City analysts are expecting earnings at ASOS to rise by healthy double-digit percentages over the next couple of years at least. These forecasts are helped by expectations that people will blitz webstores and physical stores alike with the cash they’ve saved during Covid-19 lockdowns. This is by no means guaranteed though.
A Bank of England policymaker has just predicted that as a little as 5% of these accumulated savings could be spent each year. This could have significant implications for the ASOS share price if profits growth subsequently disappoints.
Another of the best retail shares to buy
I believe Chinese business Alibaba (NYSE: BABA) is another great way investors can make money with e-commerce. The number crunchers at Statista believe China’s online retail market will grow by a staggering 8.6% between 2020 and 2024. Brazil is the only country predicted to punch stronger growth over the next several years.
Alibaba is one of the three largest e-retailers in the Asian country. This naturally makes it one of the best shares to buy to capitalise on this booming market. Sales here rose 37% in the final quarter of 2020. The company doesn’t come cheap though and trades on a forward price-to-earnings (P/E) ratio of around 30 times. Like ASOS, this could prompt a sharp share price correction if trading starts to disappoint for whatever reason.
Electrifying dividend yields
I think ContourGlobal (LSE: GLO) is another great buy for Stocks and Shares ISA investors like me following recent share price weakness. The power station operator’s fall has pushed its forward dividend yield to a mighty 6.2%. I don’t think a corresponding P/E ratio of 21 times is too excessive either, given its excellent structural opportunities.
Energy demand is expected to rocket in the years ahead and I think ContourGlobal is one of the best stocks to ride this trend. I particularly like the company’s exposure to fast-growing emerging economies in Latin America, Africa and Eastern Europe.
That said, UK energy-generating shares like this do face increasing regulatory scrutiny over the environmental impact of their operations which could damage future and existing projects.