With private equity investors showing increased interest in UK shares, analysts have been running their slide rules over British stocks. I have done the same and considered the best shares to buy now for my portfolio. Here are three I’d consider buying today.
Pharma giant
The well-known pharma company AstraZeneca (LSE: AZN) has become a household name on the back of its vaccine rollout. But the vaccine is only one part of the company’s portfolio.
For some years, a concern about the company has been its future drug pipeline. But as the vaccine development has helped demonstrate, AstraZeneca’s talented team of scientists has world class expertise in drug development.
Shares have been moving up steadily since March. But that has still only taken them to within 1% of where they were a year ago. So what makes me see these as some of the best shares to buy now? I like the company’s strengthening pipeline, its increased public visibility and the 2.4% dividend yield. But risks remain, not least the likely success of drugs currently under development. If they disappoint, that could hurt future revenues.
Best shares to buy now: JD Sports
From the Euros to the Olympics, this is a summer of sport. That should be good for a leading sports retailer such as JD Sports (LSE: JD).
But I see more than just a seasonal story for these UK shares. Over many years the company has demonstrated an ability to grow both revenues and profits. That has been underpinned by its well-oiled business model, operational skill, and geographic expansion.
What could be a risk – the rise of online retail – the company has managed to turn to its advantage. Not only has it ramped up online selling as a percentage of its revenue streams, it has also embraced digital tools to keep on top of emerging trends. I think JD’s ability to tap into different parts of the market helps it. As consumers trade up or down, they don’t feel the need to abandon the store for a competitor. That builds lasting customer loyalty.
One risk, though, is that as JD’s global reach expands it could lose focus. With shops from Australia to the US, management could become increasingly stretched. As any sports player knows, taking one’s eye off the ball even for a moment can be a costly mistake.
A profitable tech company
Also on my list of shares to buy now is Sage (LSE: SGE). The software supplier is a successful tech company hiding in full sight. Despite a profitable history spanning many years, a progressive dividend policy and large user base, Sage often barely gets mentioned when investors are discussing tech shares. So why does Sage number among my list of best shares to buy now for my portfolio?
I think there is a lot to like about it. Its business model is proven. A focus on accounting software helps generate recurring revenues. The company has a well-defined customer base of small and medium-sized enterprises, which has enabled it to establish a reputation.
But there are risks here. Cloud-based competition has increased and that could drive down the company’s profit margins.