Last night, Amazon.com (NASDAQ:AMZN) announced a 20-for-1 stock split, along with a $10bn share repurchase programme. Sometimes a stock split can cause a jump in share prices. In 2020, both Apple and Tesla split their stocks and share prices rose between the announcement and the split taking place. I currently own Amazon stock in my portfolio. So is the upcoming stock an opportunity for me to buy more shares, or should I wait until after the split?

Stock split

Amazon’s move is a 20-for-1 split. That means that Amazon shareholders will receive a further 19 shares in the company for every share they own and each share will be worth a twentieth of the current share price. At the time of writing, shares in Amazon trade at around $2,785. I currently own two of them. So after the split, I’ll own 40 with each share being worth around $139. 

Fundamentally, a stock split makes no difference to Amazon as an investment opportunity. Splitting the stock doesn’t change the market cap of the company. Nor does it change the amount of money that the company will make over time, but it does make it easier for small investors to buy in. It also makes the stock more accessible from the perspective of trading options. The share price might go up or down as the split approaches, but it might do this at any time. 

Amazon stock

For me, as an investor with a focus on the long term, the question of whether or not Amazon stock is a buy comes down to the question of how much money the company will make and the price of the company as a whole. Overall, I think that Amazon shares are attractive at the moment. They currently trade below the average price that I paid for them and I don’t believe that the business has become any less attractive than it was when I first bought in. So I’m looking at making a further investment now.

I think that its dominant positions in e-commerce and cloud computing mean that it has significant earnings growth ahead. And I think that this growth justifies its share price. In particular, I feel that the high margins of the company’s Amazon Web Services segment make the stock an attractive investment to me at current prices. The fact that the company has announced its intention to split its stock is irrelevant to me from an investment perspective.

Market timing

Splitting Amazon’s stock might cause the price to rise for a number of reasons. It might attract attention from smaller market participants, either by allowing them to own the stock, or by making it easier for them to trade options. This might could that the stock split offers an opportunity for a quick trade. As an investor, though, my ambition isn’t to work out when the stock is at its lowest and try to make money by selling it after a split pushes the price higher. Rather, my ambition is to try and identify a time at which Amazon stock trades below my estimate of its fair value. As a result, I’m looking beyond the fluctuations in price that might happen on the split and at the business’s fundamentals, which I think justify buying Amazon stock right now.

Stephen Wright owns shares in Amazon. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Amazon, Apple, and Tesla. 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.

Key points

• The escalating military situation between Russia and Ukraine is the direct cause of the recent stock-market sell-off
• A ceasefire may be the catalyst for the end of the recent downward price movement
• Buying is overcoming selling in many stocks this week, as positive sentiment grows among investors 

The recent stock market sell-off hit almost every industry in the market. It emerged from the escalating military situation in Ukraine, after the Russians took the final step and invaded. The FTSE 100 index is down 6.2% in the past month. Over the last year, however, it is still up 6.1%. While many investors panicked and sold shares, others have used this time as a buying opportunity. As some share prices begin to fight back, I now want to know if this recent sell-off might end soon. Let’s take a closer look.

Why did the stock market sell-off happen?

The recent sustained selling was a direct result of rising tensions between Russia and Ukraine. We can see this in the way it affected companies operating in that area. Ferrexpo, an iron ore firm that mines in Ukraine, saw its share price plummet. In the past month, it has fallen 48% and over the year it is down 58%. It currently trades at 144p.

In addition, the share price of Hungary-based short-haul airline Wizz Air crashed 30% in the last month and is down 45% over the past year. It currently trades at 2,828p. Investors were worried that the conflict may interfere with its commercial flights.  

The war has caused the share prices of other firms to surge. Companies engaged in the mining of precious metals, like Fresnillo, have seen their share prices fly because gold and silver are seen as safe havens in times of strife. Similarly, shares in protective equipment businesses, like Avon Protection, have increased because of their potential use in combat.

When will it end?

The end of the stock market sell-off will probably only coincide with the conclusion of the conflict. This may come in the form of an enduring ceasefire. In recent days, ceasefires have been agreed and broken at pace. It now seems another one is in place to allow Ukrainian civilians to leave certain cities across the country.

In addition, the foreign ministers of Ukraine and Russia are meeting in Turkey today for talks. I will be watching these talks very closely to see the outcome. 

Looking at the market itself, it does appear that increased buying is already taking place. Since the beginning of this week, there has evidently been more buying than selling. International Consolidated Airlines Group, for instance, is up 22.7% since Monday, down 36% in the past year. It currently trades at 133p. I think this could be a good sign.

Overall, it is difficult to pinpoint an exact timescale for the end of the stock market sell-off. Very recent price movement indicates some optimism, but any breakdown in discussions between Russia and Ukraine could extend the sell-off further. As for me, I’m sticking to my long-term principles and looking for further buying opportunities. 

Andrew Woods owns International Consolidated Airlines Group. The Motley Fool UK has recommended Avon Protection and Fresnillo. 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.

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Evraz (LSE: EVR) a penny share? Surely nobody expected that. When I’ve looked at Evraz in the past, one of my main concerns has always been that it operates in Russia. It’s a country with a poor record on transparency, and regulatory bodies could scupper an investment at the drop of a hat. But the Evraz share price, though cyclical, showed long-term gains.

I was so far off the case in thinking that weak trust in regulatory bodies might be the biggest Russian threat. Yes, operating in Russia did turn out to be a big risk. But I never envisaged Russia going to war with Ukraine and being globally ostracised. 

Even after a minor rebound, the Evraz share price is now down 85% over the past 12 months, at 80p. But in the first few days of March we were looking at a 90% loss.

Investors clearly fear any sanctions that might be applied to Evraz. Roman Abramovich is the company’s biggest shareholder. As well as him, a number of other Russian oligarchs hold shares.

Latest updates

But against those fears, Evraz this week released an “update on certain matters.” It said that for the purposes of sanctions regulations, it “does not consider itself to be an entity owned by, or acting on behalf or at the direction of, any persons connected with Russia and thereby caught by such legislation.”

That did seem to reassure the markets, and the Evraz share price ticked up a little. But so far, it hasn’t been able to stay out of the penny share range and hold above 100p.

The company did admit that it cannot be certain whether Abramovich and other Russian shareholders are “connected with Russia” for sanctions purposes. So sanctions fears have not gone away. And on Thursday, the UK government decided to sanction Abramovich.

Other than that, Evraz reckons its operations are largely unaffected.

The company has, however, decided that paying the previously declared interim dividend might not be such a good idea in the circumstances. So Evraz has now cancelled that dividend, and will review its approach to future payouts.

Evraz share price too low?

Is the price fall overdone, and is it now a good time for me to finally buy? I’ve been on the fence over Evraz a number of times. I like its cash generation and big dividends. I’ve always liked its business in steel production too, which is a commodity with potentially very strong long-term demand.

Had you told me a year ago that today I’d have the opportunity to buy at an 85% discount, on a penny share price, you would have had my attention. At the same time, though, I’d be wanting to know what the catch was. The catch is obvious, but I’m also held back by ethics. I won’t invest today in what’s essentially a Russian company.

But I’m thinking about a possible time when investing in Russia is ethically acceptable again. And I do think there could be future buying opportunities before the Evraz share price regains its strength.

Alan Oscroft 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.

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The Boohoo Group (LSE: BOO) share price was up by 15% in early trading on Thursday after the fashion retailer said profits for last year should be in line with forecasts.

Boohoo’s share price has fallen by more than 70% over the last 12 months, as the company has repeatedly slashed its profit guidance. However, I think today’s update could be a turning point. In this piece I’ll explain why I may now buy Boohoo for my portfolio.

Getting back on track

Boohoo’s net sales (that is, its sales excluding returns) rose by 14% during the financial year ending 28 February. Adjusted profits before certain costs are expected to be in line with forecasts, at £125m.

Although this is a big drop from £174m last year, the key point for me is that Boohoo is delivering as expected. This suggests to me that the company is back in control of its operations and performance. That’s a good sign.

Of course, we’ve seen the Boohoo share price surge before over the last year, only for results to disappoint again. One key concern in my mind is that the company’s core youth brands might be overshadowed by newer rivals.

There’s still some risk here, but I feel more confident than I have before about Boohoo’s turnaround. Here’s why.

Following a master investor

Famed investor Jim Slater had some clear requirements for buying turnaround stocks. In my time as an investor, I’ve found them very useful. The good news is that I think Boohoo satisfies most of these requirements today.

In his book The Zulu Principle, Slater said that it was “absolutely essential” that forecasts for the year ahead show a return to profit growth. That’s true for Boohoo. Broker forecasts suggest earnings will rise by around 15% during the current year.

Another requirement is that a company’s sales should still be intact. That way, when profit margins recover, profits should rise quickly. This is also true for Boohoo. The group’s revenue is expected to have risen by 14% to £1,987m last year. That’s a new record.

Although profits fell last year because of higher costs in areas such as shipping and returns, I expect this situation to normalise. If Boohoo’s profit margins return to historic levels over the next couple of years, my sums suggest that profits could double.

Why I’d buy

I think this online fashion group still faces some challenges. But Boohoo’s UK sales are still rising, and the company said today that its rest-of-the-world business has now also returned to growth.

I’ve always been impressed with Boohoo’s ability to market and grow its brands, and I don’t see any reason why this should have changed. I’m also reassured by the presence of former Primark boss John Lyttle, who is Boohoo’s chief executive. I reckon Mr Lyttle should have the organisational skills needed to complement Boohoo’s creative flair.

The shares currently trade on around 13 times 2022/23 forecast earnings. If the company returns to growth as expected, I think the shares could look cheap at this level in a couple of years. I’d be happy to add some Boohoo stock to my portfolio today.

Roland Head has no position in any of the shares mentioned. The Motley Fool UK has recommended Associated British Foods and boohoo group. 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.

There’s been talk in the financial press for a while of a rotation from so-called growth shares to value shares. Inflation means this trend is likely to stay. Accepting that premise, these two UK shares look to me to be potential bargains, offering the chance of both dividend income and share price growth.

A top UK share for income and growth

Redrow (LSE: RDW) is a UK housebuilder. It won’t be everyone’s cup of tea as this industry clearly faces some headwinds. The cladding tax, rising interest rates and the potential impact on mortgage demand and availability, a cost of living crisis, increasing materials costs and a tapered ending of government support to housebuilders. That’s quite a list of things to worry about on top of the dreadful war in Eastern Europe and all the other things dragging markets down so far this year.

Yet from a valuation and income perspective, Redrow has a lot going for it. The P/E is just seven and the price-to-earnings growth ratio – favoured by growth investors like Jim Slater – is 0.26, indicating the housebuilder is potentially very undervalued.

The dividend is covered nearly three times by earnings so has plenty of room to grow further, even though the shares already yield 5.4%.

I already have shares in FTSE 100 housebuilder Persimmon, but even so, Redrow looks compelling and I may buy the shares for the long term. It combines income and a cheap valuation, which could be a platform for strong future share price growth.

Another top share

Norcros (LSE: NXR) is exposed to some of the same risks as a supplier to housebuilders and other property companies. It owns and manufactures a range of household-related brands, such as Triton showers and Johnson Tiles, the leading manufacturer and supplier of ceramic tiles in the UK.

With Norcros there’s the political risk that comes with having significant operation in the South African market. The flip side of that is that if this emerging economy does well, Norcros should benefit.

The group has a 2025 Strategic Vision, with targets including £600m revenue by that year, having 50% of revenues derived from overseas and a sustainable ROCE of more than 15%. All of these indicate the potential for growth and ambition on the part of management. Its current revenue, for context, is £324m.

The shares are undemanding from a valuation perspective. The PEG is 0.13, while the P/E is eight. The dividend yield is just under 3.5% and is covered just under three times by earnings.

I have owned this share before, and as the shares struggle in this current market sell-off, I’m very tempted to buy them again.

A more passive route to getting more exposure to value stocks can be gained by investing in trusts or funds. These pool together investments. In my opinion, the investment trust Merchants Trust or the Fidelity Special Situations fund might be good options for me too. These professionally run investments have a strong bias towards value shares and could do well this year and beyond. All the more so if the rotation to value really takes root.

Andy Ross owns no share mentioned. The Motley Fool UK has recommended Norcros and Redrow. 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.

I consider housebuilder Crest Nicholson (LSE:CRST) as a good buy for my portfolio right now. The FTSE 250 stock is certainly trading at a discount, having fallen from highs of over £6 a share in 2017. The sub-£3 share could be too cheap to miss, and evidence suggests the company is on track to make solid progress following the Covid-19 pandemic.

In 2021, the firm returned to profit after a difficult pandemic for all UK housebuilders, posting a pre-tax profit of £86.9m — an impressive turnaround from 2020 when Crest registered a loss of £13.5m.

Crest currently offers an attractive dividend yield of 4.9% and has a price-to-earnings ratio of 7.84.

The firm is also starting to see the benefit of several strategic decisions. In January, the board spoke of a “transformed” balance sheet, with net cash at year-end totalling £252.8m, up from £142.2m at the end of 2020.

Crest also noted that its return on capital employed increased to 17.2% from 7.6%.

The firm reiterated that 2022 should be less volatile than the previous two years and suggested that the new leadership team had established a strong footing for future growth.

Crest also announced that 63% of revenue for the 2022 financial year was already covered.

“We were delighted to increase profit expectations twice in the year and we have started 2022 with a strong forward order book and everyone in Crest Nicholson is excited about our plans for expansion,” said CEO Peter Truscott.

Furthermore, the firm is seemingly less exposed to costly recladding procedures which have set other housebuilders back tens of millions.

The broader outlook for the industry is positive too. This week, Halifax said that house prices were currently rising at their fastest rate in 15 years.

Housebuilders, however, will need to overcome inflationary pressure on building material and labour. Research published by Knight Frank in February showed that 90% of companies anticipated the cost of building to rise further across England in 2022.

While build cost inflation this year isn’t expected to be as high as 2021, rising hydrocarbon prices — accelerated by sanctions on Russia — may change this forecast.

And after years of low-cost mortgages, there’s also concern that further interest rate rises could dampen demand for new homes and even contribute to falling property prices.

In summary, it’s clear that Crest still has some way to go in order to get back to its 2017 heights, but the signs are positive if it can successfully navigate inflationary pressure. This is why I hold them in my Stocks and Shares ISA and will increase my position.

James Fox owns shares in Crest Nicholson. 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.

The Stocks and Shares ISA deadline is fast approaching. I’ve got until 5 April to maximise as much of this year’s tax allowance as I possibly can. I’ve got some savings that I’d like to add to my ISA and I’m currently looking for the best FTSE 100 shares to buy.

I don’t need to buy shares as soon as I’ve added funds to my ISA, but given recent market turmoil, I think there are some bargains available.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

FTSE 100 sale

As a long-term investor for many years, I know that share prices rise and fall. Quite often, stock market declines can be an opportunity for me to buy quality UK shares at lower prices. A bit like a clearance sale.

As the FTSE 100 index includes the UK’s largest 100 listed companies by market capitalisation, that’s where I’d start. It’s full of established companies, many of which are household names.

Right now, I reckon the UK is one of the cheapest developed markets in the world. Recent share price falls have also caused the average FTSE 100 dividend yield to rise to 3.9%. That’s great news for income investors like myself.

Although I own a broad selection of growth stocks, and value shares, I also own many dividend shares. Yes, these shares can grow at a relatively slower pace, but I like the regular income that they provide.

10% dividend yield!

One FTSE 100 share that I reckon is both on sale and offers an excellent dividend yield is Imperial Brands. It currently trades on a price-to-earnings ratio of just 6 times and offers a market-leading dividend yield of 10%.

Analysts expect sales and earnings to rise modestly over the next few years. That said, it will need to carefully manage regulatory change. It’s a feature that is common in the industry, but Imperial has much experience in managing the impacts.

Overall, it’s a highly cash-generative business with a large portfolio of established brands. I reckon it offers excellent value and would consider adding it to my ISA.

Defensive quality share

My next FTSE 100 share that I’d buy is drinks maker Diageo (LSE:DGE). Its shares have dropped by 14% this year, and it’s now trading at the same price as last summer. But little has changed regarding the fundamentals of this company to warrant such a discount, in my opinion. It’s a high-quality business that I’d be happy owning for many years.

In the current climate, it’s nice to own some defensive shares. And I reckon it doesn’t get much more defensive than Diageo. It owns many major brands, including Guinness and Smirnoff, and has a history spanning centuries. I think plenty of these brands will still be thriving in the decades to come.

That said, commodity costs are rising fast and Diageo will need to carefully manage any potential cost pressures.

Looking at the numbers, I like that this Footsie drinks giant operates with a 30% profit margin. It also offers a return on capital employed of 17%, a key measure of business quality. Overall, I reckon the share price fall has created an opportunity to add these quality shares to my ISA.

Harshil Patel has no position in any of the shares mentioned. The Motley Fool UK has recommended Diageo and Imperial Brands. 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.

The new tax year begins on 6 April 2021, which is just around the corner! Again, investors will be able to put up to £20,000 in their Stocks & Shares ISA. I personally like the structure for its tax advantages and plan to invest in growth stocks to try and boost the overall returns I get from April 2022, when the new ISA tax year starts, through to March 2023, when it finishes.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

Top stocks for a growth focused Stocks & Shares ISA

Small-cap growth stocks have been out of favour, which I think presents opportunities for long-term investors. Cerillion (LSE: CER) strikes me as one potential top growth share for my ISA. Another top option, in my opinion, is Franchise Brands (LSE: FRAN).

Cerillion is a provider of billing, charging, and customer management systems. It was formed in 1999, so is an established company, giving me confidence that it has strong customer relationships and a service that is in demand.

It has shown strong sales and revenue growth. When it comes to the latter, revenue has gone from 8.5m in 2016 to £26.1m in 2021.

Another benefit of the strong financial performance of the group is that the dividend is growing strongly. It has gone from 4.5p in 2018 to 7.1p in 2021.

A current ratio (current assets minus current liabilities) over two indicates there is good balance sheet strength. That potentially protects the downside risk of investing in Cerillion. But, if technology stocks keep falling, Cerillion may just get pulled down along with other stocks.

All in all, Cerillion looks like a high growth stock trading at a reasonable price. The price-to-earnings growth (PEG) ratio, for example, is only 0.8. This indicates the shares are not expensive. That’s why I’m tempted to add the shares when I have next year’s ISA allowance.

Expensive – but worth it?

Franchise Brands is unsurprisingly a franchisor. It owns franchises across a B2B division comprised of Metro Rod, Metro Plumb, and Willow Pumps, and a B2C division that incorporates ChipsAway, Ovenclean, and Barking Mad. In November 2021, it acquired Azura Group, a franchise management software system developer that the group says represents an important step in its digital journey. It could both improve the operations of the group’s franchise businesses, and also be sold as a service to other businesses.

Franchise Brands has seen rapid revenue growth in recent years. It has gone from £4.5m in 2016 to £49m in 2020 (the latest full-year figures).

Like with Cerillion, the strong performance allows management to grow the dividend quickly.

The biggest pause for thought would be that the shares are not cheap. They trade on a P/E of 27, while earnings growth has been a bit volatile and actually declined in 2020, making the shares expensive on a PEG ratio basis. As with all franchisors, a perennial risk is that it falls out with major franchisees, as has been seen with Domino’s Pizza in recent years. 

Nonetheless, with management’s strong track record, good revenue growth, and the potential for big dividend increases, I like the share.

Cerillion and Franchise Brands are, in my opinion, two top UK shares to add share price growth and could therefore be ideal for my new Stocks & Shares ISA allowance. 

Andy Ross owns no share 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.