I’ve been looking for the best shares to buy today. And I’ve found plenty of attractive looking stocks in the FTSE 100.
My best shares to buy today
The shares I’ve been considering can be broadly split into two different buckets—companies that have benefited from the pandemic, and those that may benefit from the recovery.
Businesses that fall into the second bucket include BHP, Rio Tinto and Anglo American. These are some of the largest mining companies in the world. They produce everything from iron ore, a key steel component, to coal, copper, nickel, platinum and even diamonds.
Countries worldwide are already developing economic plans to help recover from the pandemic. For example, the UK is planning to spend as much as £100bn on infrastructure projects over the next few years. Chinese policymakers have plans to spend as much as £5.7trn.
These massive infrastructure commitments will require tremendous amounts of resources. That should be great news for BHP, Rio Tinto and Anglo American. Demand is already translating into higher prices. The price of iron ore has increased by nearly 100% over the past 12 months.
These tailwinds are the reasons why I believe these FTSE 100 companies could be some of the best shares to buy today. That said, these businesses aren’t without their risks.
Mining can be a challenging profession. Corporations have to deal with labour disputes and health and safety issues all the time. These can push up costs and hit profit margins. At the same time, the commodity market can be highly cyclical. Just because iron ore prices have increased over the past 12 months doesn’t mean that will continue to be the case. They could fall just as fast, leading to large losses for mining enterprises.
Still, I’d buy these stocks for my portfolio based on their income and growth potential.
FTSE 100 growth
The other bucket of investments that I reckon could be some of the best shares to buy now are businesses that have prospered in the pandemic. Companies that fall into this bracket, in my opinion, include Bunzl and Halma.
Bunzl’s sales increased by a mid-single-digit percentage in the third quarter of last year. Meanwhile, Halma projected a decline in profits for the year of between 10% to 15%. That’s not the best return, but it’s better than many other FTSE 100 companies.
Unfortunately, just because these firms have performed well over the past 12 months, doesn’t mean they’ll continue to do so. However, both organisations have an impressive track record of being able to grow through both the good and bad times. They’ve used a mix of organic expansion and acquisitions to drive growth.
This strategy isn’t without its challenges. Buying smaller firms can end up in disaster, and if these companies spend too much, they could run into problems with their creditors.
Both Halma and Bunzl are also labour-intensive businesses. That exposes them to the risk of rising wages, which could hit profit margins and cause the groups to lose customers if they raise prices.
Nevertheless, I’d buy these FTSE 100 firms for my portfolio.
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.