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Best shares to buy now: 5 stocks I’d buy

·3-min read
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I think some of the best shares to buy now are located in the tech sector. With that in mind, here are five related stocks I’d buy for my portfolio right now.

Best shares to buy now

The first two stocks I’d buy are not the sort of businesses most people imagine when they think of tech companies. Those tend to be software owners. However, hardware is just as important. And that’s why I’d buy Spirent Communications and XP Power.

Spirent makes communications equipment and is currently seeing an increase in demand for technology as the world moves towards 5G technology.

Meanwhile, XP manufactures AC-DC power supplies for the electronics industry. It’s a major supplier for electronic equipment producers, and its kit forms a vital part of manufacturers’ infrastructure.

As the technology industry continues to expand, I think both companies should experience growing sales and earnings. That said, I’d note the fact that the electronics industry is incredibly competitive. Just because these organisations dominate their respective sectors today doesn’t mean they will always continue to do so. It’s the most considerable challenge they face right now.

Still, I think these are some of the best shares to buy now and I’d acquire both.

Recurring Revenue

Subscription-based software businesses can be some of the market’s most lucrative firms. This is why I’d buy both Sage Group and Avast for my portfolio.

Both companies produce software that fulfil critical functions. For Sage, it’s accounting while for Avast, it’s cybersecurity. Customers are unlikely to want to skimp on these products, so they’re willing to pay a high price and sign up for lengthy contracts.

These are the primary reasons why I believe Saga and Avast are some of the best shares to buy now. Both companies have strong recurring revenue streams, giving management plenty of capital to invest for growth and return cash to investors.

The primary challenges these companies face are reputation and competition. Saga and Avast have strong businesses today, but there are plenty of competitors in the market. So they need to make sure their offering to consumers remains solid, or competitors could grab market share. This could have a significant negative impact on growth.

Computer services

The final company I believe is one of the best shares to buy now is Computacenter. I see this as an all-rounder. The group helps its customers transform and manage IT infrastructure.

As many companies have been forced online over the past year, business has exploded. Earnings per share increased 51% last year, off the back of 26% growth in 2019.

As the world becomes more and more reliant on technology, I reckon demand for Computacenter’s services will continue to grow. That’s why I’d buy the stock for my portfolio today.

However, the main risk facing the enterprise is competition. The sector is incredibly competitive. As such, it’s always going to struggle to win clients in such an environment.

The post Best shares to buy now: 5 stocks I’d buy appeared first on The Motley Fool UK.

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Rupert Hargreaves owns no share mentioned. The Motley Fool UK has recommended Avast Plc, Sage Group, and XP Power. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Motley Fool UK 2021

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