The Stocks and Shares ISA is a great vehicle for my investments. I’m about to add more funds to my ISA account following the start of new tax year. As a result, I’ve been looking at stock picks that could help my ISA grow over the medium and long term.
The three companies I’m looking at today are recruiter Hays (LSE:HAS), high-end fashion brand Burberry (LSE:BRBY) and investment platform Hargreaves Lansdown (LSE:HL).
Hays
The recruitment firm has fallen from a year high of 181p to 117p at the time of writing. This comes despite a very strong UK labour market, which is a core operating location for Hays. Job vacancies in the British economy recently hit a record high with 1,318,000 positions advertised.
However, recruitment firms are very sensitive to fluctuations in the economy. It appears that inflationary pressure and unfavourable economic forecasts have weighed on this stock’s share price.
Hays raised its profit guidance following a solid first half in February. Pre-tax profits in the six months to the end of December surged 363% to £97.7m. Full-year profits are expected to be between £210m and £215m, in line with pre-pandemic performance.
I’m also confident that pent-up demand for its services will drive future growth. Millions had delayed job moves during the pandemic.
Burberry
Despite inflationary pressure and the increasing negative economic outlook, I think demand for Burberry’s products are fairly immune to price rise issues. Consumers, particularly wealthy individuals, are often willing to pay whatever’s asked to get what they want.Â
Burberry’s share price has also been impacted by its decision to close shops in Russia after the invasion of Ukraine. China’s economic turmoil has also weighed on the share price. As I write, it is trading at £16.08 a share, down from a year high of £22.67.
Burberry posted solid financials in 2021, with pre-tax profit in excess of pre-pandemic results. It reflected an increase in consumer and business activity following the lockdowns of the previous year. One concern is geopolitical risk. China is one of Burberry’s largest markets and Chinese customers have been known to turn against brands.
I currently don’t hold Burberry stock, but I’m looking to add it to my portfolio.
Hargreaves Lansdown
Hargreaves Lansdown’s investment platform is the market leader in the UK. Despite this, the Bristol-based firm reported a 20% drop in pre-tax profit for the six months ended December, sending its stock sliding. The company had benefited from a trading boom during earlier lockdowns. But profits fell in a calmer 2021.
Hargreaves is currently trading at 1,028p a share, down from a year high of 1,778p. Despite the fall in profits, the company remains profitable and saw sizeable increases in revenue in each of the five years to 2021.
The drop in profit overshadowed the company’s plans for digital transformation. The company intends to spend an extra £175m over the next five years in order to improve its offering to clients. It may be a while before we see the results.
I’ve already bought Hargreaves, but if I were to buy more today, I can expect a respectable 3.7% yield.