Should I Buy These 5 Shares?

LONDON -- I've been popping stocks into my shopping basket in recent weeks and it's about time I took one or two to the checkout. Here are five stocks I've found tempting, so should I buy any of them?

Amec
When I sized up engineering consultancy Amec (LSE: AMEC  ) on Feb. 14, it had just endured an unhappy Valentine's Day. It must have expected a big hug after publishing full-year results showing profit before tax of 8% to 336 million pounds, a healthy 3.6 billion pounds order book, and a 20% dividend hike. Instead, it got a slap in the face, with the share price falling 6%.

Share price growth has been disappointing for the last five years, during which time it returned just 30%. It is down 15% over two years, against a 7% rise for the FTSE 100 as a whole. Its recent first-quarter trading update didn't charm the market, either, despite a 68 million-pound services contract for BP. Investors are worried by management caution and its low-to-mid-single-digit revenue growth forecast.

Still, Amec is on target to meet its target of 100 pence earnings per share (EPS) this year, one year ahead of target. You can buy it on a modest 12.2 times earnings and pocket a 3.7% yield, covered 2.2 times. The stock may be unloved, but undeservedly so.

Shire
Specialist biopharmaceutical company Shire (LSE: SHP  ) has returned 115% to investors over the past five years, but it is down slightly over the last 12 months. Some of that growth was driven by takeover speculation, now fading. You should expect a little turbulence with Shire, which relies on maintaining its impressive record of product development and innovation and delivering on its well-stocked pipeline. It is also on the acquisition trail, buying Californian biopharmaceutical company SARcode.

On a lowly yield of 0.7%, and a pricey valuation of 22 times earnings, this stock is for growth investors only. Forecast EPS growth of 67% may get your juices flowing, even if it is followed by a more measured 14% next year. Goldman Sachs rates Shire a buy with a 26.75 pound target price, up from today's 19.81 pounds. Deutsche Bank has a more modest 23.25 pound target. That may ease your nerves if you're worried about the stock's toppy valuation.

Man Group
I've always suspected hedge funds aren't all they're cracked up to be, and the performance of hedge fund manager Man Group (LSE: EMG  ) has confirmed my prejudices. Its underperforming flagship AHL fund sparked a shareholder mutiny that ended in chief executive Peter Clarke walking the plank. His replacement Manny Roman is having a better time of it, with Man rallying 40% in the past six months.

An operating margin of -54.7% and forecast EPS growth of -27% in 2013 will deter most investors, but 46% EPS growth in 2014 will draw risk takers -- as will its recent 13.5% yield. But don't bank on getting that again -- future payouts will depend on management fee earnings and available capital surpluses. This year could still yield between 4% and 6%, however, if forecasts are to be believed.

The current share price is 1.08 pounds: Canaccord Genuity has just hiked its target price from 75 pence to 1.20 pound, and upgraded from hold to buy. RBC Capital Markets also has a 1.20 pound target price. That's not a huge amount of upside, given the current share price of 1.08 pounds. For now, I'm backing my prejudices.

Reed Elsevier
I last checked out Reed Elsevier (LSE: REL  ) at the end of February, after it published its 2012 final results showing a 6% rise in underlying adjusted operating profit to 1.7 billion pounds and 4% underlying revenue growth to 6.1 billion pounds. With EPS up 42% and net debt more than halving to 3.1 billion pounds, I liked this stock. And rightly so, as it has since risen nearly 8% to 7.61 pounds.

Reed has adapted nicely to the online revolution, while too many of its publishing rivals are struggling. It has stalled in the last month. A Goldman Sachs downgrade to neutral didn't help, although Investec has since rated it a buy with a target price of 8 pounds.

Reed Elsevier is a good company, but the numbers look a little too humdrum to me, notably a fair valuation of 15.2 times earnings, matched by a mid-range yield of 3% and steady forecast EPS of growth of 6% this year and 8% next. There must be more excitement out there.

WPP
Today's Manchester United team isn't so attractive, but it has mastered the art of winning ugly. You could say the same about global advertising agency WPP (LSE: WPP  ) . In fact, chief executive Martin Sorrell already has, admitting that the company achieved its recent expectation-beating results "the ugly way."

Still, there's nothing too shabby about a second successive year of 10 billion-plus pounds of revenue, especially given the tough market for advertising. A hatful of 10 brokers have hailed WPP a buy this month, including Numis (target price: 12.70 pounds), Nomura (13 pounds) and Goldman Sachs (13.40 pounds). Today, you can buy it for 10.34 pounds. It's valued at a modest 13.3 times earnings with a 2.8% yield, covered 2.7 times, which gives it a bit of scope for growth. Forecast EPS growth of 5% this year and 9% next year suggest WPP will still continue winning, even if it has to do it the ugly way.

So there are five more shares to consider for your portfolio. But are they good enough to feature in our special report, "5 Shares to Retire On"? This free report by Motley Fool share analysts names five FTSE 100 favorites to secure your retirement. To find which companies they have named, download this report now. It won't cost you a penny, so click here.

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