I’m looking for the best stocks to buy following recent market volatility. Here are three from the London Stock Exchange I’d buy today and seek to hold for the long term.
Packing serious potential
Many engineering stocks like Mpac Group (LSE: MPAC) face significant uncertainty as the global economy deteriorates. But I think this business could fare much better than many in the current climate.
This is because Mpac designs and manufactures high-speed packaging and automation systems. With labour shortages worsening and staff costs increasing, demand for its services could be set to jump.
Indeed, a third of UK firms plan to invest more in automating their processes due to employee shortages, according to an HSBC survey of 670 companies published this week.
I think investors can expect Mpac’s profits to soar as the technological revolution rolls on. Analysts at Grand View Research also think the global robotic process automation market will expand at an incredible compound annual growth rate of 38.1% between now and 2030.
The flying dragon
Auto retailers such as Pendragon (LSE: PDG) aren’t just under threat from broader economic conditions. They also face the danger of new car shortages as car production rates stall.
In recent days, GM announced some 95,000 vehicles were sitting unfinished due to chip shortages. This is a problem affecting major motorbuilders all over the globe.
Yet despite these threats, I’m still considering buying Pendragon stock. I think the business could benefit enormously over the short term and beyond as environmental worries and soaring petrol and diesel costs supercharge demand for electric vehicles (EVs).
Latest data from the Society of Motor Manufacturers and Traders (SMMT) showed sales of battery-powered and pure hybrid vehicles in the UK continue to rise strongly despite the cost-of-living crisis. These were up 18% and 12% year-on-year respectively in May.
A top stock for tough times
Unfortunately the number of UK businesses going bust is tipped to soar as the economy tanks. It’s an environment in which FRP Advisory Services (LSE: FRP) could see demand for its operations explode.
In fact, the corporate restructuring expert is already witnessed a strong pick up in trade. Revenues jumped 21% in the 12 months to April. The business said it has seen the level of enquiries pick up in recent months due to rising economic headwinds and the removal of government support for businesses.
FRP also provides consultancy in the realm of mergers and acquisitions. Unfortunately, this is an area that could suffer in the short-to-medium term as economic conditions deteriorate.
Still, I think the firm’s expertise in several other areas more than offset this risk. As well as providing restructuring services, FRP also helps companies deal with debt, disputes and pensions issues. I expect it to thrive and this is reflected in its soaring share price.