A blockbuster stock market debut may be great for Wise (LSE:WISE), but it’s not so good for investors. And the best shares to buy now, in my opinion, are a world away from the £9bn fintech.
Asset managers like Scottish Mortgage Investment Trust, with enough cash and clout to get in early, have made a fortune. Their method? Buy Wise and flip the shares to the likes of small private investors like me.
CityWire tells how the tech fund doubled its money when Wise arrived on London’s stock market.
According to the FTSE 100 trust’s annual results to 31 March 2021, they made an absolutely killing. Wise made up 1% its £9.2bn NAV. Since then it has doubled to £18.1bn.
Best shares to buy now
An old boss of mine — now the CEO of an AIM-listed company — gave me some great advice back in the day. “If everyone else is in the trade,” he mused, “what new information do I have that is going to make me money? What edge do I have?” Can I snap up the best shares to buy now at a much lower price than everyone else? If the answer is no? Don’t invest.
I couldn’t buy Wise shares a year ago when Scottish Mortgage did. At the time, Bailie Gifford’s flagship fund managed to buy Wise when it sold $319m of shares. Again — these were only available privately, to the rich and powerful.
Instead of focusing on the shares that everyone else is excited about, I buy mine at a discount. Then I simply wait for the rest of the market to realise they missed a bargain.
Building back better
UK building companies are about to have a stellar year. That’s just one of the reasons why shares in Alumasc (LSE:ALU) are at the top of my list of best shares to buy now. I’ve covered Alumasc once before, in March 2021. I said this £100m micro-cap stock was a great buy for value and growth. In the months since, the building products supplier has grown from 170p to 275p, a tidy 61% profit.
But there’s more to come, I think. A May trading update pointed out: “Following a record first half year performance that saw double digit revenue growth and also a double digit return on sales, it is pleasing to report that this momentum has continued into Alumasc’s last four months.”
Upside/downside
All of Alumasc’s divisions are reporting strong performance. That increased market share, along with “encouraging” export sales to grow overseas business makes the shares a compelling buy for me.
Market conditions could fall off with the end of the stamp duty holiday. And cutting costs by £2.4m has improved margins, but these could fall if increased raw material and shipping costs become the norm. But anyone who has tried to get a builder to do any work will know that supplies are in massive demand.
If Scottish Mortgage had £1,800 to invest, rather than £18bn, I believe this is what they might do too. The less money we have as investors, the smarter we have to be. Because we have to beat the giants at their own stock-picking game.