The best shares to buy now could be those companies likely to benefit from an improving economic performance. For example, they may be sound fundamentally, but have struggled to post improving financial performance because of a recent weak economic outlook.
Meanwhile, other companies could be sound investments today because of changes occurring within their industries. They may be well-placed to capitalise on them, and could deliver rising profitability as a result.
With that in mind, here are five FTSE 100 shares that appear to offer a mix of recovery potential and sound strategies. Over time, they could provide a better chance of doubling an initial investment.
The best shares to buy may benefit from improving industry prospects
Companies such as BP and Lloyds could be among the best shares to buy now. That’s because of their potential for improving operating environments in their industries. For example, the oil & gas and banking industries have been negatively impacted to a large degree by the weak economic outlook. However, history suggests this situation will improve. This could increase demand among investors for companies operating in such sectors.
Furthermore, BP’s plan to pivot towards a greener asset base may provide a more sustainable profit growth outlook over the long run. Meanwhile, Lloyds’ digital focus could mean it has a relatively large competitive advantage as technological changes impact on the banking industry.
Investing in companies with the right strategies
Other UK shares may also benefit from an improving economic outlook. For example, as coronavirus disruption eases, retailers such as Next and Morrisons may experience rising demand for their products as a result of improving consumer confidence.
Furthermore, they’re investing large sums of capital in their online operations. This could mean they gain a growing competitive advantage over peers that are focused on store sales. Especially now that a growing proportion of shoppers are favouring digital channels to purchase a wide range of goods. This trend may continue, and could lead to rising profitability for Morrisons and Next.
Similarly, AstraZeneca could be one of the best shares to buy today. It has focused on improving its pipeline and exposure to emerging economies. These changes, alongside recent acquisitions, could strengthen its long-term earnings growth prospects. In turn, that could lead to a higher valuation versus its industry peers.
Doubling an investment in shares
All of the above companies could outperform the stock market in the coming years. Doing so could reduce the amount of time it takes to double an initial investment. Historically, that’s been less than a decade based on the stock market’s high single-digit annual total returns.
With many companies trading on low prices despite their long-term growth potential, now could be the right time to unearth the best shares and hold them in the coming years.