Should I Buy These 5 Shares?
LONDON -- Shopping for shares isn't easy, there's so much to buy! How's a Fool to choose? Here are five stocks I've added to my shopping basket in recent weeks, but should I take any of them to the checkout?
Everybody loves a comeback kid, and there are plenty of reasons to love the U.K.'s biggest insurer, which has shown rival Aviva how to thrive in a crisis. Prudential's share price has risen 30% this year, which means it isn't cheap, trading at 12.5 times earnings, but it isn't so expensive, either.
Better still, its strategy of targeting growth in the Far East looks like the right one. I already own this stock, but there are plenty of reasons to buy more. Only the relatively low 3.1% yield puts me off, but that's the price of success.
BARC or bite?
I also asked Should I Buy Barclays
Fool user BigJC1 reckons there will always be a good long-term case for investing in the banks, pointing out that "all of us need banks, they oil the wheels of commerce and their continued troubles are doing nobody any good."
Other Fools were also keen to buy, although some were hanging on for more eurozone troubles, in the hope of buying at a cheaper price than today's 236 pence. If it does fall, I'm a buyer.
Tesco's share price has suffered another Big Price Drop in recent weeks, falling to just 310 pence, after announcing that it won't be expanding its loss-making U.S. chain Fresh & Easy.
The retailer's announcement of drive-through shopping in the U.K. did little to revive investors' appetite, and the shares are now 25% off their 52-week high.
Tesco does appear to have lost its magic touch - maybe it became too big for its boots. That said, on a handsome yield of 4.8% and a forecast P/E of 9.4 times earnings for February 2013, it could prove to be a bargain buy.
One more corporate disaster could sink the company for good, especially if U.S. regulators scent blood. Then again, all the bad news could be in the price, which is still 33% below where it was before the Deepwater Horizon spill.
BP has been recovering steadily, and should have more mileage in its tank. I'm not rushing to fill up on BP, but I'm confident my current stake will motor steadily ahead.
There are some wise Fools out there, as I discovered when I asked Should I Buy RSA Insurance
Fool user Ferrethandler said I had missed the "elephant in the room" that insurers such as RSA have "stonking" exposure to rising interest rates, which could hammer their holdings of bonds. So that's another thing to take into account if you're tempted by that 8.1% yield and forecast P/E of 9.7 for December 2012.
Actually, I wasn't that tempted anyway, to be honest. RSA just doesn't excite me. It could also find the going heavy in future, especially if another wet U.K. winter drowns it in flood claims.
Five into one does go
Why buy five stocks when you can buy one? Especially when it's the One UK Share That Warren Buffett Loves.
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The article Should I Buy These 5 Shares? originally appeared on Fool.com.Harvey Jones owns shares in Prudential and BP. He doesn't hold any other share mentioned in this article. The Motley Fool owns shares in Tesco. The Motley Fool has a disclosure policy.
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