3 stocks I’m not waiting to buy — the window could be closing fast

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Being a good investor involves taking opportunities to buy stocks when they present themselves. And that’s exactly what I’ve been doing with three UK shares. 

I’m convinced that all three are good value at the moment, but I’m not sure how much longer they’re going to stay that way. So I’ve bought the trio within in the last week.

JD Wetherspoon

The market keeps thinking JD Wetherspoon (LSE:JDW) is set to put up a bad earnings report, but it hasn’t happened. As a result, the stock trades at a price-to-earnings (P/E) ratio of 11. 

A number of hospitality venues have been closing down since the last Budget. But this has been a good thing for the firm – each time it happens, a competitor disappears. 

JD Wetherspoon relies on volume to provide its lower costs. So a potential downturn in consumer spending could be a big problem for the company’s margins and profitability. 

Right now though, I’m seeing like-for-like sales growth in an industry that’s in trouble. That’s very positive for the firm’s competitive position, so I’m buying before the market notices.

Gamma Communications

With Gamma Communications (LSE:GAMA) it’s the customer base I think are missing something. The company’s a provider of cloud-based business communication systems.

UK organisations have until January 2027 to move their systems before the copper network is switched off. But a large number of companies either haven’t realised or are delaying.

That’s led to some pretty uninspiring recent results from the firm. And the risk, of course, is that the date of the switch off might be pushed back, removing the need for urgency. 

One way of another though, I think the big move for the business is coming sooner or later. So I’m looking to buy the stock while it’s down 59% from the record highs achieved in 2021.

Macfarlane

Macfarlane (LSE:MACF) shares recently crashed 20% in a day after the packaging firm issued a profit warning. A fatality at one of its Pitreavie factories has brought operations to a halt.

An investigation is ongoing and there are open questions about potential future liabilities and customer retention, which presents a risk. But I think investors are missing something here. 

The packaging company only acquired Pitreavie recently and £4m of the deal still depends on future earnings growth. And that’s much less likely to be triggered as a result of the accident.

Given this, I think the market’s overestimating the effect of the awful fatality on Macfarlane’s business. It’s a stock I already owned in my portfolio, but I’ve been adding to my investment.

Investment opportunities

Being greedy when others are fearful inevitably involves looking to buy stocks at times when other people think they look risky. And this isn’t always easy. 

I think however, there are a few cases where investors are overestimating the risks with specific UK stocks. So I’m looking to take advantage of this. 

With JD Wetherspoon, Gamma Communications and Macfarlane, the risks are genuine. But I don’t think the market’s pricing them correctly and this is why I’ve been buying.

The post 3 stocks I’m not waiting to buy — the window could be closing fast appeared first on The Motley Fool UK.

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Stephen Wright has positions in Gamma Communications Plc, J D Wetherspoon Plc, and Macfarlane Group Plc. The Motley Fool UK has recommended Gamma Communications Plc and Macfarlane Group Plc. 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.

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