Stock market

My Top 3 Stocks to Consider Buying in May

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Sell ​​and move in May? Not for me – I think there are some great stocks that investors should consider buying this month.

With some corners of the stock market looking expensive, I think focusing on quality businesses is the way to go. And I think there are still opportunities for investors.

Taylor Wempe

Encouraging UK inflation data has recently got investors thinking about a cut in interest rates. And Taylor Wempe (LSE:TW) could be a big beneficiary of this.

Lower interest rates are likely to make mortgages more affordable, increasing demand in the housing market. And I don’t think the current share price matters.

Like other major UK housebuilders, Taylor Wimpe is being investigated by the Competition and Markets Authority. Exactly what will come of this is uncertain – and therefore a risk.

However, the company has a good reputation for build quality. And with a 7% dividend that I’m not sure is too risky, I think this stock is worth considering.

Purveer

At a price-to-earnings (P/E) ratio of 18, the industrial filtration business Purveer (LSE:PRV) is at the upper end of where I would like to buy stocks. But I think it still seems like a decent price for a quality operation.

Porvair’s success is based on repeat orders – it is difficult (and in some cases impossible) for customers to change supplier. This keeps them coming back, resulting in strong revenue.

This means the biggest risk is a downturn in its end markets. And demand for laboratory equipment, which accounts for 35 percent of revenue, has been weak due to high inventory levels built up during the pandemic.

I’m expecting it to be back to normal soon, though, Porvair sample filters are changed after every use. With things normalizing, I’m expecting this to be a great stock for the long term.

MercadoLibre

MercadoLibre (NASDAQ:MELI) is an e-commerce company that operates throughout Latin America. It consists of an online marketplace, payments platform, logistics business, and loan distribution.

With 25% of the firm’s revenue coming from Argentina, inflation is a risk. But the company has a strong competitive position that I expect will yield strong returns on investment in the long term.

The key to MercadoLibre’s dominance is the way it works with all of its components. An efficient shipping business makes the market more attractive to buyers and sellers.

In turn, this generates volume for the payments processor. The bigger the company gets, the harder it becomes to dislodge, and its impressive recent growth puts it on my list of stocks to buy.

Quality

I don’t think there is ever a bad time to buy shares in high-quality companies. Over the long term, I expect owning more of these businesses in my portfolio to prove valuable.

As I see it, May is another opportunity to keep growing my investments. And that’s what I want to do with businesses that have significant potential and strong competitive positions.


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