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As we head into November, I am still looking for shares to buy for my portfolio.
Although I look at the US too, most of my search is currently focused on the UK stock market.
But this month has seen the FTSE 100 index of leading companies hit a new all-time high. Meanwhile, the UK economy feels sluggish and there is ongoing economic uncertainty about the government’s taxation plans. Having been bitten last year by that, many investors are now twice shy.
So, is now really the right time for me to be looking for shares to buy in the London market?
A market of stocks
I think so, which is why I am doing it.
It is easy to think of the stock market as a monolithic mass.
In reality, though, it is a market of thousands of individual companies. At any one time, some of those may hold great promise relative to their current share price. Others will likely be overvalued.
In other words, I do not think there is ever necessarily such a thing as a bad time to buy shares, in terms of what the market is doing. The point is what specific shares one chooses to buy.
UK shares have some possible attractions
While the UK economy looks sluggish, it is still moving forward.
At the right price, a share in a company in a sluggish economy can still be a bargain.
The London market also hosts many overseas companies whose operations are largely or totally outside the UK. So the twists and turns of the UK economy may have limited impact on their business fortunes.
Meanwhile, many British shares continue to look attractively valued to me. Sure, the top end of the market has been hitting new highs. But that does not mean that there are not still some brilliant possible bargains.
Is this share a bargain?
As an example, consider a share from the FTSE 250 index: Pets at Home (LSE: PETS).
The share has actually moved up 6% this year, although that masks a turbulent ride including a profit warning last month. The company pointed to a decline in the overall pet market.
There is a risk that could continue, as consumers cut back spending on their moggies and mutts. But overall I expect the pet market to stay at broadly its existing size, or grow, over time.
Pets at Home is well positioned to benefit from that.
It has an extensive network of large shops as well as a digital platform that it has been busily upgrading. It also has a sizeable and growing chain of vet practices, with another 10 expected to open this year as part of larger plans to expand the vet business.
Over time, I see this as a business likely to have attractive financial characteristics (have you paid a vet’s bill lately?)
But Pets at Home sells for only 12 times earnings and offers a dividend yield of 6% to boot.
I see it as a share for investors to consider this November.