1 FTSE 100 stock I’d buy before the ISA deadline

The time to use this year’s ISA allowance is running out. But there is a FTSE 100 Stocks on the radar that I bought if I was an investor with cash to distribute before April 5th.

I believe in the principle that investing in a good business will result in a good investment. So, I’m going to buy shares Halma (LSE:HLMA).

Summary

Halma is a collection of small organizations that focus on three specific areas. The first is industrial safety, the second is environmental monitoring, and the third is life science.

Usually, investors have to choose between businesses with a dominant market position and those with good growth prospects. But with this company, I think I got the best.

Halma’s subsidiary is focused on maintaining its leading position in the specialty market. But the company is growing its revenue by adding more businesses to its portfolio.

In other words, each subsidiary is difficult to disrupt, but collectively their size means there is room for growth. I think that makes it a great stock to have.

Result

Halma’s business model has a good track record. Over the last 10 years, revenue, operating income, and earnings per share have grown between 9% and 10% per year on average.

As a result, Halma’s share price has risen from £5.11 in March 2013 to £21.10 today. It increases by an average of 15% per year.

The underlying business also has some strong intrinsic features that make it durable. The main thing is the fact that it does not cost much to open.

Halma achieved £417m in operating income using £194m in fixed assets. And capital expenditure is less than 20% of cash produced by operations.

That means the company can use most of the cash it generates to reduce debt, reinvest in the business, pay dividends, or fund buybacks. This makes it attractive as an investment.

Evaluation

The biggest risk with Halma stock is the price. At a price-to-earnings ratio (P/E) of 35, this startup doesn’t seem like a stock investors should be looking at with rising interest rates.

I don’t see any credible way to argue against cheap stocks. But I see this as a case of following Warren Buffett’s advice and buying a good company at the right price.

Ultimately, I expect returns from stocks to follow fundamental performance over the long term. And I think the Halma subsidiary will do well for a while, causing the stock to follow suit.

For an investor with a long-term outlook, this looks like a good stock to me. So if I had the money to invest before April 5th, I would buy it now, instead of hoping for a better price.