I think there are many attractive investment opportunities in the FTSE 100 index right now.
Global geopolitical uncertainty has had a substantial impact on the valuations of many different businesses. Some of these companies may be able to escape the economic uncertainty that is emerging as a result of the crisis.
As such, I would capitalise on the volatility and buy these FTSE 100 companies with £5k for my portfolio today while they look cheap compared to their growth potential.
Property market growth
I think Rightmove is one of the most attractive businesses in the blue-chip index. The company owns the online property platform which carries its own name. This is one of the most visited websites in the UK, and it has a substantial competitive advantage over its peers.
Estate agents have to list their properties on the site or they could be missing a massive market opportunity. That being said, it has faced increasing competition, with rivals attempting to nibble away at its market share.
This is the biggest challenge the group is likely to face as we advance. Despite this headwind, I would buy the stock for my FTSE 100 portfolio today.
I am also attracted to the qualities of online car marketplace Autotrader. This company has a similar competitive advantage to Rightmove.
It owns and operates one of the most visited websites for cars in the UK, which means it is usually the first port of call for consumers. With demand for second-hand vehicles in the UK booming, the business is on-track to report rising sales and profits this year.
Once again, it does face competition. The biggest challenge the corporation faces is dealing with this competition and trying to provide something consumers cannot get elsewhere.
Nevertheless, until this point, the company has managed to fend off those rivals. As such, I would be happy to buy the tech stock for my portfolio today.
Market leader
I would also require FTSE 100 distribution group Bunzl for my portfolio. This company’s main competitive advantage is its size. Distribution is a very low margin business.
Economies of scale are fundamentally important for success in the long run. And that is exactly what Bunzl has and it grows by acquiring smaller peers.
Still, even though the business does have an advantage over the rest of the industry, it is still at risk from uncertainty. Its thin profit margins could vanish if costs rise significantly across the enterprise.
Such a development would limit the group’s ability to compete effectively and find attractive bolt-on acquisitions. Even after taking this risk into account, I think the FTSE 100 company has fantastic potential over the next couple of years and I would buy the stock for its competitive advantages today.
The post FTSE 100 shares I’d buy with £5k appeared first on The Motley Fool UK.
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Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has recommended Auto Trader, Bunzl, and Rightmove. 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.
