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The best shares to buy now in the FTSE 100

Rupert Hargreaves
·3-min read
macro shot of computer monitor with FTSE 100 stock market data in trading application
macro shot of computer monitor with FTSE 100 stock market data in trading application

When it comes to finding investments, I think the FTSE 100 is a great place to start. With that in mind, here are some of the best shares to buy now in this blue-chip index, according to my research.

FTSE 100 opportunities

I’ve been looking to buy companies that may benefit from the global economic recovery over the past few months. I’ve settled on two businesses I believe are well-positioned to profit from the rally.

Anglo American and BHP are mining giants. I think they should benefit from the growing demand for commodities around the world as the economy reopens. And the businesses are already reporting a significant increase in profitability.

Commodity prices have jumped over the past 12 months. I think this trend will continue. If prices don’t increase, I believe they’ll remain high for the foreseeable future as demand remains elevated.

Of course, commodity prices can fall just as fast as they rise. With that being the case, these companies aren’t for the faint-hearted. If the economic recovery starts to splutter, commodity prices could crumble, which would lead to falling sales and revenues at both Anglo-American and BHP.

Considering these risks, I think they’re the best shares to buy now… but only as part of a diversified portfolio.

Best shares to buy now

As well as the economic recovery plays outlined above, I’d also buy companies with a strong track record of being able to operate through all economic environments.

FTSE 100 growth stocks Bunzl and Halma both tick this box. The distribution and health and safety businesses operate in two relatively defensive industries.

Even in the worst economic environments, health and safety will always be a core consideration for companies. The same is true of distribution. Even in an economic downturn, customers will want to have products available to sell to clients.

As well as the defensive nature of these companies, they also have a good track record of buying growth through small acquisitions.

These two factors are the main reasons why I believe they’re the best shares to buy now. When owned in a diversified portfolio, I think they’ll produce steady returns for investors, no matter what the future holds for the global economy.

However, they’re not risk-free. A strategy based on acquisitions can, and has, hurt many a business who has overpaid in the search for growth. What’s more, the strategy could also build elevated levels of debt. Both of these could be headwinds, hindering growth in the long run.

But despite these risks and potential challenges, I’d buy the stocks for a diversified portfolio of FTSE 100 shares today. When combined with the economic recovery plays outlined above, I think this could make the perfect portfolio for the next few years.

The post The best shares to buy now in the FTSE 100 appeared first on The Motley Fool UK.

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Rupert Hargreaves owns no share mentioned. The Motley Fool UK has recommended Halma. 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