In the past year, the FTSE 100 index has risen 14%. But I think there are still great shares to be found at attractive prices. Here are five names on my list of the best shares to buy now.
Domino’s Pizza
With reopening looming, there is the prospect of a sharp spike in self-isolation cases. I think that could provide a boost for takeout and delivery food providers such as Domino’s Pizza.
There are other reasons I see Domino’s as one of the top shares to buy now for my portfolio. The company’s retrenchment into its core markets in the UK and Ireland is set to boost profitability. Its strong brand recognition reduces the need for marketing expenses, in my view. It also has a proven operating method when it comes to managing a large-scale pizza distribution network.
One risk with Domino’s is its limited product range. That could leave it exposed if customer food trends shift.
Ibstock
Brick manufacturer Ibstock has added 17% in the past year. I continue to see value here as I think ongoing strength in construction will lead to high demand for building materials. Bricks are cumbersome to transport, so Ibstock’s string of UK clay pits and brickworks is a competitive advantage.
But a risk is that a recent building materials squeeze could attract new entrants to the market. Any supply glut could lead to falling profits the next time building activity slows.
Big Yellow
Self-storage operator Big Yellow has warehouses across the country. It offers exposure to what I see as a long-term trend. As housing costs continue to increase, many householders are storing some of their goods in self-storage facilities. Similarly, businesses that have downsized their premises during the pandemic still often need somewhere to store equipment.
The company seems bullish: it recently tapped the market in order to fund a couple of planned acquisitions. Yet acquisitions always present an execution risk, and if they don’t turn out well, that could dampen the share price.
Direct Line
Like Big Yellow, insurer Direct Line benefits from association with an iconic coloured object – the red telephone. The well-known brand is not just popular with customers – investors like me number it amongst the best shares to buy now for its dividend.
Last year it paid out 36.5p in dividends per share. That partly reflects delayed pandemic dividend payouts. Nonetheless, the prospective yield is around 7%.
Directors haven’t bought a single share this year, though, and I wonder why. One risk is pricing pressure as customers who barely used their cars for months are seeking rebates from insurers.
Renalytix
Finally, kidney diagnosis platform provider Renalytix has seen its shares pull back lately. I regard that as a buying opportunity.
With its proprietary technology now backed by clinical trial results providing a boost to credibility, I expect Renalytix to start building revenue streams in the near future. It has recently beefed up its executive team to help do just that. But a risk is that a competitor develops a superior kidney diagnostic platform, reducing demand for the firm’s tech.