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I don’t know if we’ll see a stock market crash this autumn, but given all the speculation lately, it wouldn’t come out of the blue.
There’s plenty of chatter about US shares being overvalued, the inflationary impact of tariffs, and artificial intelligence (AI) being in a bubble. If these weigh on Wall Street, the FTSE 100 will no doubt take a hit too. That’s often the way it goes.
The UK’s blue-chip index has had a good run lately, and nothing rises in a straight line forever. Whatever happens, I’m ready. I’ve got some cash in my Self-Invested Personal Pension (SIPP), and there are three companies I’d love to buy.
Bunzl may bounce back
I’ve highlighted Bunzl (LSE: BNZL) several times lately, but I still haven’t bought the stock. It distributes everyday items that keep businesses ticking over, from gloves and cleaning products to paper towels.
The Bunzl share price ticked up nicely for years, until it announced a profit warning in April that showed falling demand in North America, and struggles in Europe and the UK too.
The shares are down 22% over the last year, so arguably, the buying opportunity is already here. Especially with Bunzl trading at a modest price-to-earnings ratio of 12.9, suggesting confidence may be creeping back. But I shouldn’t leave this one too long.
London Stock Exchange Group slips
The London Stock Exchange Group (LSE: LSEG) share price has had a poor run. It’s down 5% over the last year and up just 6.7% across five. Yet the underlying business looks healthier.
First-half results on 31 July showed adjusted earnings per share up 20.1% to 208.9p, while the interim dividend was hiked 14.6% to 47p. Management also launched a £1bn share buyback. The group has a major growth opportunity in its partnership with Microsoft, developing AI solutions for banks and asset managers.
AI’s a double-edged sword. It could reduce City headcounts, limiting demand for London Stock Exchange software. I’m also worried about its lofty P/E of 26. I’d prefer to get in at a cheaper level.
Phoenix Group’s flown
I already own Phoenix Group Holdings (LSE: PHNX). I bought it two years ago when the dividend yield was close to 10%. Today, I’m sitting on total returns of about 50%, with roughly half of that from share price growth. The Phoenix share price is up 24% in a year and 38% over two.
The yield’s now slipped to 7.82% while the P/E’s risen to around 15. Those are decent numbers but the stock isn’t quite the outstanding bargain it once was.
Phoenix generates lots of cash and I think the yield looks secure. It operates in a mature and competitive market, and the shares may easily slip after their recent strong run. A stock market dip would give me the perfect excuse to average down and grab myself more of that juicy income.
All three merit serious consideration today, but I’d rather add them on weakness. Trouble is, waiting for the perfect entry point can mean missing out altogether. I’ll start building positions in September. If markets turn choppy, I’ll accelerate my purchases.
