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Here are the top two UK stocks to buy right now.

Here are the top two UK stocks to buy right now.
Here are the top two UK stocks to buy right now.

 


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According to those who sold in May and left, now is the time to buy stocks again. I don't follow this strategy, but I'm still adding to my portfolio now.

The FTSE 100 and FTSE 250 have been relatively stable recently. However, a few blue chip stocks have fallen significantly and I think this presents an opportunity for investors like me.

Rentokil

Shares in Rentokil Initials (LSE:RTO) plummeted in September after the company released its latest trading update. In doing so, it highlighted one of the stock's main risks.

In 2022, the company spent just over $4.5 billion to acquire its main U.S. competitor, Terminix. However, the expected increase in demand has not materialized so far, resulting in high costs.

Nevertheless, the stock price seems attractive after the 20% decline. The explanation for this is that the pest control market is expected to grow due to several reasons.

First of all, climate change is in large part due to warmer summers and wetter winters, creating an environment in which pests can thrive.

I also expect Rentokil's expansion into the U.S. will prove valuable over time. It's hard to say exactly when that will happen, but I think it will be difficult for the company to compete in the long term.

As an investor, this is the business I want to own. And while the market is concerned about short-term profits, I'm looking at the bigger picture.

AG Top

Frankly, I thought I had missed the opportunity to buy shares in AG Barr (LSE:BAG). However, a 9% decline following the company's interim results has caused a change of heart.

Sales rose 5%, but profits fell due to costs associated with the closure of its distribution business. But I don't expect this to happen again, so I think the problem is temporary.

In its most recent annual report, management laid out a path to reduce costs in the coming years. Guidelines have been issued that the operating profit margin will reach 14.5% by the end of 2026.

Since the company's CEO has changed since then, relying on previous forecasts is risky. However, once the expected efficiencies are realized, profits can increase significantly.

Achieving these goals could increase Barrs' operating profits by 31%, even if sales no longer increase. If that happens, I think the stock price will rise.

Since the stock price has fallen, I think it is not expensive at the current price. So, I have been purchasing this product for my portfolio and plan to continue to do so.

Britain's Opportunity

In terms of my portfolio, I look for stocks of quality companies trading at attractive prices. And I think there's an opportunity now, even if stocks are pretty stable overall.

In my opinion, both Rentokil Initial and AG Barr fall into that category. So I recently purchased both and plan to continue purchasing them in the future.

Sources

1/ https://Google.com/

2/ https://www.fool.co.uk/2024/09/29/here-are-my-top-2-uk-shares-to-buy-right-now/

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