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When considering which stocks to buy, UK investors have a literal buffet of options before them. From the elite FTSE 100 down to AIM shares, there are potentially many lucrative opportunities at any time.
Here, I’ll highlight one UK stock I’m buying and another I’m keen to avoid.
Being disrupted?
Let’s start with the one I’m giving a wide berth. This is ad agency WPP (LSE:WPP), the worst-performing stock in the FTSE 100 this year (down 55%).
It’s not hard to see why. In H1, the company’s revenue less pass-through costs fell by 4.3% on a like-for-like basis, landing at £5 bn. But headline earnings per share (EPS) slumped by 35% to 20p, while the dividend was reduced by 50%.
The big fear investors have here is that AI might automate parts of the advertising industry, making the creative process faster and cheaper. Google, TikTok, Meta, Comcast and Amazon are all developing powerful AI tools to help advertisers create and place ads. This risks commoditising some of the services that ad agencies make money from.
Now, I don’t think WPP is doomed by any stretch of the imagination. It has established relationships with some of the world’s biggest brands, while leveraging AI to improve its own competitiveness.
Meanwhile, the stock looks incredibly cheap, trading on a single-digit forward earnings multiple. And there’s a new CEO coming in with fresh ideas. So I can see why some might take a contrarian view on WPP.
But I worry there might be profit margin pain ahead as the firm adapts its business model for the AI age. Uncertainty is only likely to increase as deep-pocketed Big Tech rolls out more sophisticated AI tools, making this one to avoid for my own portfolio.
Doing the disrupting
Turning to the stock I like, it’s Wise (LSE: WISE), the global money transfer firm. Last year, it processed more than £145bn in cross-border transactions, saving some 15.6m people and businesses £2bn in fees.
In Q1 of FY26, which ended in June, Wise made solid progress. On a constant currency basis, cross-border volume jumped 27% year on year to £41.2bn, while underlying income grew 14% to £362m.
Wise is disruptive in that it cuts out hidden fees in international transfers by matching local flows at the real exchange rate, making payments cheaper and more transparent. And it’s having great success signing up businesses, banks and other FinTechs.
On Q1, CEO Kristo Käärmann commented: “We continue to add significant Wise Platform partners. In the first quarter, we announced a partnership with Raiffeisen Bank, followed by UniCredit in July, to power instant, low-cost international transfers for their personal and business customers in Europe.“
One risk here, however, is that the global economy is still fragile due to tariff uncertainty. So the shares could be a bit volatile later this year. Lower rates could also eat into Wise’s interest-related income.
Taking a longer-term view, though, I’m bullish. The company is founder-led and progressing very well. Last year, Wise Business launched in Brazil and Hong Kong, then the Philippines in Q1. So it’s really starting to scale up globally.
With the shares down 10% since June, I’m going to increase my position. I think they’re worth considering for long-term investors.
