I reckon stock market conditions look good for buying FTSE shares. But the problem for me right now is I’m already fully invested with no spare cash.
However, things can sometimes change fast. Maybe I’ll sell a stock for whatever reason. Or perhaps my earnings will accumulate sufficiently to commit to another stock position. And there’s always an outside chance of inheriting money from some great uncle I never knew I had! But that last one’s unlikely.
Nevertheless, my watchlist is active and up-to-date. And as soon as spare funds arrive I’ll dig in with deeper research with a view to buying stocks to hold long term.
Recovery potential
For example, I reckon Dr Martens (LSE: DOCS) has recovery potential. The well-known boot maker is experiencing problems with a new distribution centre in Los Angeles. And on top of that, sales in America have been lower than the directors expected.
But this one isn’t for widows and orphans. In its short life on the stock market, the company has revealed a nasty habit for spouting out profit warnings. And at prices near 146p, the stock has plunged by almost 70% in a year.
Nevertheless, I’m optimistic the firm can sort out its logistical problems. And I’m hopeful the strength of the brand can translate into rising sales and profits down the road.
If my deeper research encourages me, I’d be inclined to dip my toe in the water and buy a few shares. But perhaps I’d begin with a small position and increase it if I gain confidence in the ability of the business to turn itself around.
Strong dividend growth
But I also like the look of Sirius Real Estate (LSE: SRE). The company operates business parks providing conventional space and flexible workspace in Germany. And it also has light industrial, workshop, studio, and out-of-town office units in the UK.
A year ago, the share price stood near 126p and today it’s around 85p, representing a 32% drop. And now the price-to-book value is about 0.94 suggesting fair value.
But, for me, the attraction here is the dividend growth story. Since the trading year to March 2017, the company hasn’t missed a beat with its dividend. And it’s raised it every year since.
Looking ahead, City analysts expect the shareholder payment to increase by just over 13% for the current year to March 2023. And by 10% for the year to March 2024. Meanwhile, set against those predictions, the forward-looking yield is just below 6%.
If the firm hits those dividend expectations, I’d interpret the situation as underlining confidence in the outlook from the directors. But it’s possible for a general deterioration in the economies of the UK and Germany to derail forecasts. So there are risks as well as positive potential with this stock too.
But I’m watching both these FTSE shares closely. And I’ll be ready to pounce when the time comes.
The post 2 FTSE shares I’m poised to pounce on appeared first on The Motley Fool UK.
Should you buy Dr. Martens Plc shares today?
Before you decide, please take a moment to review this first.
(Even if you weren’t born before 1972.)
Because The Motley Fool’s top UK analysts have revealed: ‘5 Stocks for Trying to Build Wealth After 50’. And you can grab this report, absolutely free.
In our opinion, it’s never too late to build wealth with shares. Indeed, with markets down this may be an ideal time to start.
And while past performance is not an indicator of future results, history has shown that after shares fall by 20%, there’s a 90% chance they’ll be higher within 5 years.
When they do, the average return has been 61%.*
So while there are no guarantees, our analyst team have a habit record of finding such opportunities. In 10 minutes, this free report brings you up to speed .
* Source: Robert Shiller, Economist – Yale University. Figures based on historic US market data from 1871 – Present, with additional calculations by The Motley Fool.
setButtonColorDefaults(“#5FA85D”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43A24A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#ffffff”, ‘color’, ‘#fff’);
})()
More reading
- UK shares: 2 FTSE retail stocks to buy and 2 to avoid in February
- Earnings: why Dr Martens’ share price just crashed
Kevin Godbold has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.