It seems we’re never that far from a stock market wobble these days due to the murky economic and geopolitical picture globally. In fact, the last time was approximately 10 days ago. The good news is that UK stocks impacted could present great dip buying opportunities for me and my holdings.
Two stocks I’d love to snap up the next time this happens are Coca-Cola HBC (LSE: CCH) and Ashtead (LSE: AHT).
Here’s why!
Soft-drinks supremo
Coca-Cola HBC is an interesting way to access the soft drinks super giant. This stock is not the main business itself, but a strategic bottling partner with lucrative and long-term agreements to bottle and distribute some of the world’s favourite soft-drinks.
From a bullish view, it’s hard to bypass the sheer brand power and reach Coca-Cola possesses. This has helped Coca-Cola HBC grow performance and returns impressively. In fact, in 2023, it hit its highest ever revenue of £8.46bn. I can’t see the love for Coca-Cola, or demand for its products as a whole, falling sharply anytime soon.
Next, the shares look well-priced on a price-to-earnings ratio of just 14. If a market dip occurs, this entry point could become even more attractive. Plus, a dividend yield of 2.9% sweetens the investment case. However, I do understand that dividends are never guaranteed.
From a bearish view, inflation across the globe is a worry. Despite good brand and pricing power, higher costs can impact margins and profitability. This could hinder earnings and investor returns. I’ll keep an eye on this.
Overall, Coca-Cola HBC is the type of stock I’d buy and hold for many years, leaving it to grow and provide me with juicy consistent returns.
Construction giant
Moving to an entirely different industry, and perhaps more at the mercy of cyclical tailwinds, is construction rental mammoth Ashtead. In fact, it’s one of the largest firms of its kind, and makes most of its money in the US.
The biggest worry for me is a drop off in construction and infrastructure spending during times of volatility, like now. For example, fears of a recession in the US could dent its biggest market, and hurt earnings and returns.
As a Foolish investor, I’m in it for the long haul. The same US market that could pose short-term issues also presents long-term exciting growth opportunities. For example, a $1trn infrastructure bill passed across the pond could present Ashtead with the potential to boost its earnings and returns. Its vast presence is certainly a plus point here.
Moving on, the shares currently trade on a P/E ratio of 17. They do come down to close to 14 based on forecast earnings, and if a wobble were to occur, a better entry point could arise. However, I’m conscious that forecasts don’t always come to fruition.
Finally, a dividend yield of close to 2% helps my investment case.
Although slightly more risky than Coca-Cola HBC in my view, and at the mercy of more cyclical issues, Ashtead shares still look like a good buy for me.
The post I’d love to buy these 2 UK stocks the next time the stock market wobbles appeared first on The Motley Fool UK.
Like buying £1 for 31p
This seems ridiculous, but we almost never see shares looking this cheap. Yet this Share Advisor pick has a price/book ratio of 0.31. In plain English, this means that investors effectively get in on a business that holds £1 of assets for every 31p they invest!
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See the full investment case
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Sumayya Mansoor has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.
