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FTSE 100: 3 of the best shares to buy today

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Rupert Hargreaves
·3-min read
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Young lady working from home office during coronavirus pandemic.
Young lady working from home office during coronavirus pandemic.

I think some of the best shares to buy today are FTSE 100 companies set to benefit from the booming tech industry over the next few years. With that in mind, here are my top picks that I’d buy today.

FTSE 100 tech investment

One of the most prominent technology businesses in the FTSE 100 is Just Eat Takeaway (LSE: JET). Last year, the food delivery business reported a 42% increase in the number of orders placed on its platform. This growth yielded a 54% increase in revenues. Profits also jumped. Earnings before interest tax depreciation and amortisation (EBITDA) rose 18% to €256m in 2020.

Management is optimistic the company can build on this growth in 2021. However, despite its positive outlook, the stock has fallen by around a third since October of last year. I’d take advantage of this decline to buy the stock for my portfolio today.

However, Just Eat faces risks and the primary one is competition. The online delivery market is becoming increasingly competitive, and profit margins across the sector are coming under pressure. The group’s going to have to spend more and more to stay on top. This could depress shareholder returns and potentially lead to lower growth rates in the long run.

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Best shares to buy

Another FTSE 100 company I’d buy with exposure to the tech sector is BAE Systems (LSE: BA).

This might not be the first organisation many investors think of when looking for tech stocks. However, the company is one of the largest cybersecurity businesses in the country. The group is also heavily involved in developing technology for the UK defence industry.

I think this is one of the best shares to buy, thanks to its technology exposure and defence sector income. Income from defence contracts tends to be tied to multi-year agreements, which provides a steady stream of income for the group.

One of the biggest challenges BAE faces are the ethical considerations of the defence sector. The sector is also highly regulated, which means the firm can’t act with complete flexibility. The group may also be subject to sanctions and overseas sales restrictions, two risks other companies may not have to deal with.

Delivery growth

The final company on my list of the best shares to buy now to profit from the tech revolution over the next few years is retailer Ocado (LSE: OCDO).

Last year, the company reported a sharp rise in orders as consumers were forced to shop online during lockdowns. As well as its retail business, the company also sells the technology used to create robotic warehouses.

The pandemic has exposed the risks of having humans in a supply chain, and I think this could lead to increased demand for the company’s automotive technology over the next few years.

I think these twin tailwinds of rising brand awareness, coupled with higher demand for its technology, could drive the FTSE 100 stock higher. That’s why I’d buy the stock for my portfolio today.

But it’s unlikely to be plain sailing for the group. The biggest challenge it faces is a copyright claim against its automated warehouse technology currently in process. Its automation division is also running at a loss. This could weigh on shareholder returns as Ocado tries to juggle two businesses under one roof.

The post FTSE 100: 3 of the best shares to buy today appeared first on The Motley Fool UK.

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More reading

Rupert Hargreaves owns no share mentioned. The Motley Fool UK has recommended Just Eat Takeaway.com N.V. 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