Home Listing method How to buy BP stocks and shares (BP) – Forbes Advisor UK

How to buy BP stocks and shares (BP) – Forbes Advisor UK

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BP’s first quarter earnings announcement this week was mixed.

The energy giant posted quarterly adjusted profit of $6.2 (£4.8) billion, its highest in more than a decade and well above analysts’ forecast of 4.5 (3 £.5) billion. However, BP’s decision to exit its stake in Russian energy company Rosneft resulted in an overall loss for the quarter.

BP continues to benefit from soaring global demand for oil and gas as economies recover from the pandemic. Rising demand, along with supply constraints resulting from the war in Ukraine, pushed oil prices above $100 (£77) a barrel.

Although Chinese demand has been affected by the Shanghai lockdown, the EU is reducing Russian imports and plans to ban Russian oil by the end of 2022, which should support the current level of oil prices.

Due to its healthy operating cash flow, BP announced a $2.5bn (£1.9bn) increase in its share buyback programme. This follows share buybacks of $1.6bn (£1.2bn) in the first quarter, while net debt of $27.5bn (£21.2bn) was reduced for the eighth consecutive quarter.

However, BP reported a substantial $20.4bn (£15.7bn) loss in the first quarter due to a $24bn (£18.5bn) writedown of its stake in the Russian oil company Rosneft. BP estimates that the loss of future revenue from Rosneft will reduce future profits by around $2bn (£1.5bn) in 2025.

BP’s windfall profits come at a time of intense debate over the possibility of a windfall tax on energy companies to provide funds to help meet rising energy bills.

Kwasi Kwarteng, business secretary, told Sky News: ‘A windfall tax will discourage investment and we want to see investment.

It is perhaps no coincidence that BP recently announced plans to invest up to £18bn in the UK by the end of 2030, including offshore wind projects in the UK. Ireland and investments in charging stations for electric vehicles.

BP’s share price has risen almost 5% this week, with its shares currently trading at 417 pence, near their high for the year of 425 pence.

Here’s what you need to know about buying and selling BP stock.

Please note: investing in stocks does not carry any guarantees. When buying shares of a company, it is possible to lose some or even all of your money.

That said, over the long term – a minimum of five years (preferably longer) – it is possible for equity investments to produce higher returns than those available on low-interest deposit accounts, particularly once inflation taken into account.

Why own stocks?

It’s worth asking why you want to buy stocks. Are you looking for capital growth, dividend income or a combination of both? Your investment goals will determine the type of stocks you invest in, whether they’re high-growth tech stocks or more defensive companies with a reliable stream of dividends.

Most investors are looking for strong fundamentals, including a track record of consistent earnings growth, a strong market position, or products or services with potential for future growth. These should provide a solid platform for future share price growth.

That said, other factors such as takeover rumors can drive a company’s stock price higher. Investors may also be drawn to rallying plays, with a depressed stock price offering rebound potential.

How to buy stocks

Once you have decided which company to invest in, buying stocks involves several steps.

1) Open an account

Whether you are a seasoned stock trader or new to stock market investing, you will need to open an account with a regulated brokerage firm to buy shares of BP.

Stock brokerage is a competitive market and services for do-it-yourself investors come in a variety of forms – from online investment platforms run by some of the biggest names in financial services to investment trading apps that run on your smartphone. or your tablet.

Before opening an account, keep the following in mind:

  • Keep your ultimate financial goals in mind
  • Be prepared for the ups and downs of the stock market
  • Aim to keep trading costs to a minimum
  • Remember that investing in stocks may incur tax charges, for example, when selling part of your portfolio, unless you use tax-advantaged packaging such as an ISA.

And before you buy stocks, it’s worth asking yourself these questions:

  • Should I take financial advice?
  • Am I comfortable with the level of risk in question?
  • What is my investment budget?
  • Can I afford to lose money?
  • Do I understand the company I am looking to invest in?
  • Am I protected if my platform provider/advisor goes bankrupt?

2) Where is BP traded?

The stock symbol for BP plc is BP. Its main listing is on the London Stock Exchange, which is open for trading from 8 a.m. to 4:30 p.m. Its shares are also traded on the Frankfurt Stock Exchange in Germany.

3) Do your research

To learn more about BP, visit the company’s website investor relations page.

It’s also worth comparing BP’s valuation to other comparable energy companies. One way to do this is to look at relative price-earnings ratios – stocks trading on a high price-earnings ratio have high expectations of substantial future growth.

Another useful research tool is brokers’ 12-month stock price forecasts, which are available on financial websites. Broker price forecasts give an indication of the upside and downside potential for BP’s stock price over the next year.

4) What is your investment strategy?

People tend to invest in two ways: either with a lump sum purchase or through smaller, more stable amounts over time.

This latter method is often referred to as a way of “pound cost averaging,” a stock market hack that helps you pay less per share on average over time when stock markets go down. Rather than waiting to build up a lump sum, this means that an investor’s money can be used immediately in the market. However, drip feeding your investment can sacrifice capital growth if the stock price rises and you will also pay more in stock trading costs.

5) Place an order

Once you’re ready to buy BP stock, log into your investment account or trading app. Type in the stock symbol for BP (BP) and the number of shares you want to buy or the amount of money you are willing to invest.

Many brokerages also allow you to add a “stop loss” once you’ve bought the stock, allowing you to limit your losses if the stock price drops. For example, if you buy shares at £10 and set a stop loss at £9, your shares will be sold if the share price falls below £9, limiting your potential loss to 10%.

6) Examine the performance of BP

Whether your stock portfolio is full of companies or contains only a handful of stocks, it is essential that you review the performance of each component regularly: monthly, quarterly or annually.

This gives you the opportunity to review performance and ask if any adjustments to your holdings are needed – to maintain the status quo, buy more shares or sell existing shares.

How to sell stocks

At some point, you will want to sell your holdings. To do this, log in to your investment platform, enter the stock symbol (BP) and select the number of shares you wish to sell.

Note that if you have made a substantial profit, you may be liable for capital gains tax (CGT) when you come to sell your holdings, especially if your shares were held outside of tax-exempt packaging. such as an individual savings account. or a self-invested personal pension.

The non-taxable CGT allowance for the 2022-23 tax year is £12,300. Learn more here on CGT rates and allowances.

How to invest in BP through a fund

Investing directly in individual stocks can be an absorbing and hopefully profitable experience. It may also entitle you to shareholder benefits specific to the company in question.

Investing directly in individual companies, however, can make you vulnerable to stock market volatility and unexpected fluctuations in stock prices.

This is why financial experts recommend that most people invest in a diverse mix of asset classes and funds that hold a ready-made portfolio of more than fifty stocks from different companies.

As a FTSE 100 company, BP has a presence in many specialist energy funds and investment funds in the UK, as well as tracker-type exchange-traded funds.