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I have been looking for investment opportunities within the UK shares of my ISA this year. And here are three I would add more to my portfolio right now if I had the cash.
#1 Fintech's on the march!
I first invested Alpha Group International (LSE:ALPH) in 2020. What began as an affordable risk management service for small and medium-sized businesses has evolved into a full-fledged banking platform.
The group now supports a wide range of services, from international payments to alternative investment management. And this business success has also translated into jaw-dropping share price returns, making it one of my largest portfolio positions today.
Recent major economic storms have proved challenging as they have wreaked havoc on Alpha's clients. The business has managed to maintain double-digit growth despite these storms. But it has moved much slower than its normal rate of expansion. And continued uncertainty within financial markets can stifle growth and increase competition.
Fortunately, recent results have revealed encouraging trends, with July and August showing signs of improvement. And since the shares have been falling lately, I might consider buying more.
#2 The rise of advertising is coming
Following the surge in e-commerce activity after Covid-19, digital marketers have been stuck in the long winter of customer budget cuts. With high inflation sending discretionary spending down the road, firms like it dotDigital (LSE:DOTD) haven't had time for fun lately.
The company uses a digital marketing automation platform where businesses can manage existing and convert potential customers. The customer base is made up mostly of online retailers, making dotDigital very flexible in the e-commerce cycle. Growth evaporated when the ax came to marketing budgets.
However, economic conditions have improved this year. And companies are slowly starting to launch marketing campaigns, thawing the advertising winter. This is evident when you look at dotDigital's financials, with double-digit growth already paying off.
However, the share price has been low for the past 12 months. Looking at other ad-based businesses, it seems to be a recurring theme that suggests investors are still out of love with the industry. But in my experience, investing in high-quality unpopular stocks can be more profitable in the long run, even with more cyclical risks.
#3 Infrastructure projects set to explode in 2025
Somero Enterprises (LSE:SOM) has incredibly high earnings. Unlike most businesses that tend to achieve smooth results, a quick look at Somero shows revenue, profit, and cash flow were all over the place.
But such is the nature of working within the construction industry. As a manufacturer of laser-guided concrete screed equipment, you manage a long history of successfully navigating the downturn of the market. And the results of smart capital allocation are clear when you look at the last 15 years, stocks are up more than 1,350%.
Since a major part of its business depends on construction, project delays due to high interest rates have been a headache for shareholders. And that's why stocks are down 50% since the start of 2022.
But now prices are starting to fall, the backlog of construction projects is expected to begin to clear next year. So an increase in demand may be on the horizon. Obviously, there are no guarantees. But with a price-to-earnings ratio of 8.6, it's a risk I'm comfortable taking.
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