01925 937 499

Authoradmin

Home»Articles Posted by admin (Page 7)

How much a £1k investment in this FTSE 250 stock 10 years ago would be worth now!

Stagecoach Group (LSE:SGC) is a leading UK public transport company, operating in Scotland, England and Wales.

Back in January 2010, its share price was 1.72 and today it is worth 8% less at 1.58. That means if youd bought 1,000 worth of shares 10 years ago, today they would be worth around 918. Thats not the kind of return long-term shareholders are looking to obtain!

So does it still appeal? Well, the FTSE 250company is starting 2020 with a price-to-earnings ratio (P/E) of 8 and earnings per share (EPS) are 19p. Its shining star is its dividend yield at close to 5%. At first glance, these fundamentals look great, but do they hold up under closer scrutiny?

Back in 2015, the Stagecoach share price peaked at a resounding 4.09. That was up 137% from its 2010 price, but in the four years since, it has steadily fallen. Throughout 2019 it had a volatile time but overall rose 19%.

Letting go of losers

This share price volatility shows that some astute (and maybe lucky) investors could have made large gains, but for others, big losses would have been the outcome.

It is often said that time in the market is more important than timing the market and I agree, but as this one has shown, holding for the long term does not always pay off. Keeping track of the businesses you invest in is also key. You want to be investing in well-run companies with management integrity and a clear plan to make money. No one wants to hold on to losers longer than necessary.

Although Stagecoachs financials may appear enticing on paper, its trailing P/E is closer to 42, diluting EPS to 3.8p. Other than the dividend yield, this makes it seem overvalued for what it offers. Dividend cover is only 0.5 so if push comes to shove, then a dividend cut could be on the cards.

Its profit margin is 6.5% and the operating margin is 7.6%, neither of which are particularly high, and its debt ratio is very high at 85%.

Troubling times

Two months ago, Moodys Investors Service downgraded Stagecoach shares to Baa3, from Baa2. This downgrade reflected various changes to the business profile, the reduction in the firmd scale and concern surrounding a decline in UK travellers taking bus journeys.

The bad news continued as its half-year revenues fell, reflecting the end of its involvement in UK franchised rail, and its chairman and co-founder Sir Brian Souter stepped down. It is also embroiled in an ongoing legal dispute with the Department for Transport after being disqualified from bidding on a rail contract.

On the bright side, it is bidding for a 12.5-year rail contract in Sweden and it has a positive outlook on the opportunity to encourage the public to travel by public transport as an environmentally-friendly alternative to cars.

Taking all of the above into account, I think the Stagecoach share price is high. The business has shrunk, it is facing increased regulation to reduce emissions and further investment costs to upgrade buses to achieve this. Plus, the legal wrangle and unclear future direction make this one stock I would avoid.

A Growth Gem

Research into unloved sectors can often unearth fantastic growth opportunities to help boost your wealthand one of Fool UKs contributors believes theyve identified one such winner, which could be a bona-fide bargain at recent levels!

To find out the name of this company, and to get the full research report absolutelyfreeof charge, click here now.


Here’s why I’m keeping an eye on the price of gold in 2020!

Gold has been one of the best investments in 2019. Year-to-date, the gold spot price is up almost 17% and hovering around $1,523 per ounce.

In 2020, Id like to encourage our readers to learn more about the gold market from what drives the price of the underlying bullion and especially to how they can include gold shares in their portfolios. Lets take a closer look.

Gold as an asset class

This precious metal has fascinated humans since the dawn of time. Today, most gold produced is used for jewellery or investing purposes.

Globally central banks keep over 30,000 tons of the yellow metal. According to the Bank of England website our gold vaults hold around 400,000 bars of gold, worth over 200 billion. That makes the Bank of England the second largest keeper of gold in the world (the New York Federal Reserve tops the list).

You may be familiar with arguments about gold being a hedge against inflation and a store of wealth. In general gold has also had a negative correlation to stocks.

Many analysts recommend a 5%-10% allocation of a personal investment portfolio to gold as an insurance policy.

We cannot know the future with certainty. However, for a good number of people physical gold is an asset for defensive diversification.

Gold prices + economic/political developments

Investors may remember that in 2010, the spot price for gold was about $1,050. By late 2011, it almost hit $1,900, at which point a multi-year decline began. By 2016, it was below $1,100. In mid-2018, the current rally began around the $1,200 level.

There have been several reasons behind this tailwind in gold prices, ranging from worries about the escalating US-China tariff war, volatility in the oil market, talk of a global recession, macroeconomic fears, uncertainty in Europe (partly because of the developments on the Brexit front), and rather choppy global equities.

Analysts are also discussing the near-term possibility that US dollar interest rates may go to zero and that pressure may be put on the US Federal Reserve Board (Fed) to introduce negative rates. If US dollar deposits see negative rates, smart money is likely to move not into other currencies, but possibly into commodities, including precious metals such as gold.

So if you believe that the next bull cycle in gold is under way and would like to invest in it, then you can buy into gold in several ways.

Gold shares

In recent months, many gold miners have seen their share prices pop as the global gold price has surged. Within the FTSE 100andFTSE 250, companies that mine gold include ChilesAntofagasta, Mexico-basedFresnillo, Russian mining operationPolymetal, andCentamin, which focuses on the the Arabian-Nubian Shield.

If gold remains at its current price or moves higher, miners will likely report better margins and rising free cash flow, potentially boosting their share prices even further. However, income investors should note that most gold stocks are low-dividend payers.

There are also investment funds or exchange-traded funds (ETFs) that invest in gold miners. Examples of such funds would be the BlackRock Gold and GeneraloriShares Gold Producers UCITS ETF.

Alternatively, you can also consider ETFs that invest in gold itself such asETFS Physical Gold. The fund is large, well-known, and liquid. With an ongoing charge of 0.39%, it may be suitable for investors looking for asset diversification, especially in the short term.

A Growth Gem

Research into unloved sectors can often unearth fantastic growth opportunities to help boost your wealth and one of Fool UKs contributors believes theyve identified one such winner, which could be a bona-fide bargain at recent levels!

To find out the name of this company, and to get the full research report absolutely free of charge, click here now.


Welcome to 2020! Here are 3 FTSE 100 dividend stocks I’d buy and hold for the next decade

If youre looking for FTSE 100 dividend stocks to buy and hold for the next decade, its worth thinking about long-term revenue drivers. Ideally, you want to invest in companies that are set to benefit from powerful long-term trends.

With that in mind, heres a look at three FTSE 100 dividend-paying companies that I believe are well positioned to profit from dominant structural trends over the next 10 years.

Diageo

The first dividend stock Id like to highlight is alcoholic beverage champion Diageo (LSE: DGE), which owns an outstanding portfolio of brands including Johnnie Walker, Tanqueray, and Smirnoff.

The reason I like Diageo as a long-term buy-and-hold is that the company has significant exposure to the worlds emerging markets. What this means is that the firm is likely to benefit from both rising populations and rising incomes in the years ahead. Indeed, Diageo says that it expects another 550m new legal drinking age consumers across the emerging markets to enter the market by 2030 while it expects an additional 750m consumers to be able to afford international-style spirits by 2030. Thats a considerable number of extra consumers!

Diageo isnt the cheapest stock in the FTSE 100 (forward-looking P/E ratio of around 23) and its yield isnt that eye-catching either (2.3%). I wouldnt let these metrics put you off though this is a high-quality company with a fantastic dividend growth track record.

Prudential

Next up, financial services group Prudential (LSE: PRU). What appeals to me about PRU is that, after its recent demerger with M&G, the company is largely focused on the savings and insurance needs of those in Asia.

Why is this such a big deal? Simply because incomes across Asia are growing at a rapid rate. Indeed, by 2030, Asia will represent 66% of the global middle-class population, according to projections from the Organisation for Economic Co-operation and Development (OECD), up from around 54% today. This rise in wealth across Asia is likely to create a strong demand for financial services products such as savings accounts and life insurance.

Source: Prudential

Prudential shares have been a little out of favour recently due to the trade war situation and the protests in Hong Kong. I think this has created an attractive buying opportunity for long-term investors. Currently, the stocks forward-looking P/E ratio is just 10, and the prospective yield is about 2.8%.

DS Smith

Finally, check out sustainable packaging specialist DS Smith (LSE: SMDS). It specialises in manufacturing cardboard boxes (the type Amazon deliveries come in).

To my mind, DS Smith looks set to benefit from two powerful trends in the years ahead. Firstly, theres the growth of e-commerce. These days, more and more consumers are shopping online and this is a trend that looks set to continue. According to Statista, global retail e-commerce sales could climb to $6.5trn by 2023, up from around $3.5trn today.This means that demand for packaging is only likely to increase over time.

Secondly, theres the focus on sustainability. Increasingly, consumers are ditching plastics and looking for sustainable packaging solutions. Given that sustainability is at the heart of DS Smiths philosophy, I see an attractive long-term growth story here.

DS Smith shares currently trade on a forward-looking P/E ratio of 11.2 and offer a prospective yield of a healthy 4.3%. Looking at those metrics, I think the stock offers a lot of value right now.

Theres a double agent hiding in the FTSE

We recommend you buy it!

You can now read our new stock presentation.

It contains details of a UK-listed company our Motley Fool UK analysts are extremely enthusiastic about.

They think its offering an incredible opportunity to grow your wealth over the long term at its current price regardless of what happens in the wider market.

Thats why theyre referring to it as the FTSEs double agent.

Because they believe its working both with the market And against it.

To find out why we think you should add it to your portfolio today

Click here to read our presentation.


Two successful stocks of 2019 that I’d invest in for 2020

As we begin 2020, environmental, social and governance (ESG) and sustainability themes are at the forefront of investors minds as the worry surrounding climate change gained momentum throughout 2019.

Packaging is a major piece of the sustainable living lifestyle that we as consumers are striving to achieve. Therefore, how products are packaged has come under increasing scrutiny and endures a lot of negative publicity in relation to protecting the environment.

There is good reason for this, but packaging cannot be eradicated completely because it is necessary for transporting goods, protecting against disease and damage, and providing vital information such as product warnings or essential product labelling.

Two British companies involved in producing packaging are Mondi (LSE:MNDI) and Macfarlane Group (LSE:MACF).

9% share price rise in 2019

Mondi is over 50 years old and by far the biggest of the two as an international FTSE 100 company with a market capitalisation of 8.6bn. It has a price-to-earnings ratio (P/E) of 11 and earnings per share (EPS) of 1.62, and its dividend yield is an attractive 4%.

Mondi has manufacturing facilities throughout the world including Africa, Europe, Russia, and Asia and has been involved in paper making for over 200 years. It recognises the need for packaging solutions that are sustainable, reusable, or recyclable and is responding to that. It has made 16 public commitments to achieve by 2020, along with a carbon emission commitment running to 2030, plus a science-based 2050 target for production-related CO2 emissions intensity.

Earlier in December, it donated $50k to the UN Sustainable Development Goals (SDGs) One Young World competition to fund a new project in 2020 focussed on turning packaging waste into raw materials of value.

Mondis exposure to emerging markets could create long-term growth for the company but may put it at a disadvantage if there is a significant slowdown in the global economy.

Although its share price had a volatile time in 2019, it ended the year up 9%. In the four years from 2014 to 2018, its operating profit increased from 767m to 1,318m and it has a current profit margin of 12.5%.

45% share price rise in 2019

Macfarlane Group is headquartered in Glasgow and runs 3 leading UK-based businesses in the packaging and labels sector. It started 2019 with a share price of 75p and ended at almost 1.09, a rise of over 45% in the year. It has a trailing P/E of almost 19 and EPS of 5.7p, while its forward dividend yield is 2.18%.

Its main customer sectors include internet retail, aerospace, logistics, automotive, electronics, and fast moving consumer goods. The FTSE All-Share company has been listed on the main London Stock Exchange since 1973. It has a market cap of 169m, 900 employees and annual sales of 200m. Its customer base is 70% throughout the UK, 15% in Europe, and 15% in the US.

In the past couple of years, it has grown through acquisitions. In 2019, it acquiredEcopac and Leyland Packaging Company. It is also committed to improving its carbon footprint and in September launched its 100% plastic-free, biodegradable packaging protection for wine bottles. The product, called Flexi-Hex, is made from recycled materials.

In its November trading update for the period from June 30 to October 31 sales revenue grew 4% and group profit before tax was ahead of the same period in 2018.

With the rise in e-commerce, demand for packaging is ever increasing. I think both companies look like good investments for 2020.

Under-The-Radar Investment

There are a number of small-cap stocks that could be worth buying right now,and our investing analysts have written a FREE guide called 1Top Small-Cap Stock From TheMotleyFool.

The company in question may have flown under your investment radar until now, but could help you tobuild a great income from your investments and retire early, pay off the mortgage, or simplyenjoy a more abundant lifestyle.

Click here to find out all about it it’s completelyfree to do so.


6 funds I’d invest in for 2020 and beyond

If you prefer to invest in actively managed funds, as opposed to picking stocks yourself, you have no shortage of options these days. On platforms such as Hargreaves Lansdown, there are literally hundreds of funds to choose from.

That said, its important to do your research when choosing a fund for your portfolio. Some funds have performed far better than others (and lets not talk about the Neil Woodford debacle). With that in mind, heres a look at six funds Id be happy to invest in for 2020 and beyond.

UK equities

If youre looking for a UK equity fund that has the potential to deliver a nice mix of capital gains and income, take a look at the TB Evenlode Income fund. What I like about this particular fund is that the portfolio managers focus on high-quality UK businesses. Top holdings currently include the likes of Unilever, Relx, and Sage. The performance of this fund has been excellent in recent years over one year, its delivered a return of about 26% while over five years, its returned over 80%. Fees through Hargreaves are 0.9% per year (plus platform fees).

Another investment fund I like in the UK equities space is the Franklin UK Rising Dividends fund. Like the Evenlode fund, this fund has the potential to deliver both capital gains and income. Top holdings currently include Unilever, Shell, and Diageo. Performance here has been very good for a dividend-focused fund over one year the fund is up about 25% while over five its up approximately 58%. Fees are low through Hargreaves at just 0.55% per year.

Finally, if youre more of a growth investor, you might be interested in the CFP SDL UK Buffettology fund. This is a top-performing fund that, as its name suggests, invests with a Warren Buffett-like approach. It also has quite a strong focus on smaller high-growth companies. Top holdings currently include Games Workshop, AB Dynamics, and Dart Group. Over the last year, this fund has returned about 27% while over five, it has returned an excellent 127%. Fees are 1.19% per year through Hargreaves.

Global equities

For exposure to global equities, its hard to look past the Fundsmith Equity fund. Between its inception in late 2010 and the end of November this year, Fundsmith delivered a return of 363%, outperforming its benchmark by a huge margin. Top holdings here include the likes of Microsoft, PayPal, and Facebook, meaning youre getting exposure to some exciting high-growth companies. Just be aware that Fundsmith is quite concentrated, which adds risk. Fees are 0.95% per year through Hargreaves.

Another top option for global equities is the Lindsell Train Global Equity fund. Like Fundsmith, this fund has delivered fantastic returns over the years (five-year return of around 150%) but is also quite concentrated. Top holdings here include Unilever, Diageo, and Heineken and fees are a very reasonable 0.55% per year through Hargreaves.

Finally, check out therelatively new global equity fund Blue Whale Growth. Since its launch in September 2017, it has performed exceptionally well, delivering a gain of 43% to the end of November versus 19% for the Investment Associations global sector average (placing it second out of 284 funds). Top holdings include Microsoft, Adobe, and Autodesk, and fees are 0.89% per year through Hargreaves.

Theres a double agent hiding in the FTSE

We recommend you buy it!

You can now read our new stock presentation.

It contains details of a UK-listed company our Motley Fool UK analysts are extremely enthusiastic about.

They think its offering an incredible opportunity to grow your wealth over the long term at its current price regardless of what happens in the wider market.

Thats why theyre referring to it as the FTSEs double agent.

Because they believe its working both with the market And against it.

To find out why we think you should add it to your portfolio today

Click here to read our presentation.


6 funds I’d invest in for 2020 and beyond

If you prefer to invest in actively managed funds, as opposed to picking stocks yourself, you have no shortage of options these days. On platforms such as Hargreaves Lansdown, there are literally hundreds of funds to choose from.

That said, its important to do your research when choosing a fund for your portfolio. Some funds have performed far better than others (and lets not talk about the Neil Woodford debacle). With that in mind, heres a look at six funds Id be happy to invest in for 2020 and beyond.

UK equities

If youre looking for a UK equity fund that has the potential to deliver a nice mix of capital gains and income, take a look at the TB Evenlode Income fund. What I like about this particular fund is that the portfolio managers focus on high-quality UK businesses. Top holdings currently include the likes of Unilever, Relx, and Sage. The performance of this fund has been excellent in recent years over one year, its delivered a return of about 26% while over five years, its returned over 80%. Fees through Hargreaves are 0.9% per year (plus platform fees).

Another investment fund I like in the UK equities space is the Franklin UK Rising Dividends fund. Like the Evenlode fund, this fund has the potential to deliver both capital gains and income. Top holdings currently include Unilever, Shell, and Diageo. Performance here has been very good for a dividend-focused fund over one year the fund is up about 25% while over five its up approximately 58%. Fees are low through Hargreaves at just 0.55% per year.

Finally, if youre more of a growth investor, you might be interested in the CFP SDL UK Buffettology fund. This is a top-performing fund that, as its name suggests, invests with a Warren Buffett-like approach. It also has quite a strong focus on smaller high-growth companies. Top holdings currently include Games Workshop, AB Dynamics, and Dart Group. Over the last year, this fund has returned about 27% while over five, it has returned an excellent 127%. Fees are 1.19% per year through Hargreaves.

Global equities

For exposure to global equities, its hard to look past the Fundsmith Equity fund. Between its inception in late 2010 and the end of November this year, Fundsmith delivered a return of 363%, outperforming its benchmark by a huge margin. Top holdings here include the likes of Microsoft, PayPal, and Facebook, meaning youre getting exposure to some exciting high-growth companies. Just be aware that Fundsmith is quite concentrated, which adds risk. Fees are 0.95% per year through Hargreaves.

Another top option for global equities is the Lindsell Train Global Equity fund. Like Fundsmith, this fund has delivered fantastic returns over the years (five-year return of around 150%) but is also quite concentrated. Top holdings here include Unilever, Diageo, and Heineken and fees are a very reasonable 0.55% per year through Hargreaves.

Finally, check out therelatively new global equity fund Blue Whale Growth. Since its launch in September 2017, it has performed exceptionally well, delivering a gain of 43% to the end of November versus 19% for the Investment Associations global sector average (placing it second out of 284 funds). Top holdings include Microsoft, Adobe, and Autodesk, and fees are 0.89% per year through Hargreaves.

Theres a double agent hiding in the FTSE

We recommend you buy it!

You can now read our new stock presentation.

It contains details of a UK-listed company our Motley Fool UK analysts are extremely enthusiastic about.

They think its offering an incredible opportunity to grow your wealth over the long term at its current price regardless of what happens in the wider market.

Thats why theyre referring to it as the FTSEs double agent.

Because they believe its working both with the market And against it.

To find out why we think you should add it to your portfolio today

Click here to read our presentation.


Will this news give the AstraZeneca share price a shot in the arm?

2019 was filled with challenges: various geopolitical events tested the global economy as well as financial markets. But AstraZeneca (LSE: AZN) managed to end the year on a positive and encouraging note. Its drug Lynparza (olaparib) which it has co-developed and co-commercialised with Merck (known as MSD outside of the US and Canada) received regulatory approval for the treatment of pancreatic cancer.

With this approval, the drug which was already in use for treating multiple forms of cancer creates a niche in cancer treatment. The approval was provided by the US Food and Drug Administration.

Lynparza is classified as a poly ADP ribose polymerase (PARP) inhibitor. It helps in saving cells DNA repair mechanism, which stops cancer cells from duplicating. In this manner, it stops the sustenance of tumors. The latest approval will allow it to be used by pancreatic cancer patients on whom chemotherapy had been ineffective even after 16 weeks of treatment.

A brief background

AstraZeneca and Merck had announced a collaboration on oncology in July 2017. At the time, Lynparza was used for ovarian cancer treatment and its pipeline had included breast, prostrate and pancreatic cancers, among others.

On the collaboration, Chief Executive Officer of AstraZeneca Pascal Soriot had said By bringing together the expertise of two leading oncology innovators, we will accelerate Lynparzas potential to become the preferred backbone of many immuno-oncology combination therapies as the worlds first and leading PARP inhibitor.

As part of the collaboration agreement, Merck had decided to pay AstraZeneca up to $8.5 billion in total consideration, including $1.6 billion upfront, $750 million for certain license options and up to $6.15 billion depending upon successful achievement of future regulatory and sales milestones.

What does this approval mean for investors?

AstraZeneca stock has had an excellent 2019. Until December 30, its share price had increased by 31.5% for the year. Its profits have been great as well, powered by new medicine sales which surged by 62% to $2.7 billion in Q3.

Soriots outlined objectives for the collaboration with Merck, as stated above, indicate to me that the partnership has been able to achieve its chief aims. Its pipeline is continuing to be realised, which is a testimony to its drug quality. My takeaway from this is that its medicine sales, especially from the oncology vertical, would continue to be strong.

Political uncertainty has subsided in the UK but some headwinds still remain. Globally, economic challenges await the world in 2020. I believe that these factors could push investors towards defensive purchases like stocks of pharmaceutical companies in the first half of the year, which would benefit AstraZeneca.

Its P/E ratio, hovering at the 25 mark and over, is on the higher side, but its continued success with oncology medication indicates further momentum for its share price. Investors are also looking forward to the results from its POSEIDON trial. The initial results of the trial, being conducted for drugs treating lung cancer, were quite encouraging.

The new approval for Lynparza not only provides more treatment options for cancer patients in my view, it may be beckoning a buying opportunity for investors as well.

A Growth Gem

Research into unloved sectors can often unearth fantastic growth opportunities to help boost your wealth and one of Fool UKs contributors believes theyve identified one such winner, which could be a bona-fide bargain at recent levels!

To find out the name of this company, and to get the full research report absolutely free of charge, click here now.


Forget gold, Bitcoin and buy-to-let. Here’s how I’d invest £20k in 2020 to achieve financial freedom

If you have 20,000 to invest in 2020, you have no shortage of investment options. Gold, cryptocurrencies, buy-to-let property and stocks are just some of the assets you could put your money into.

Yet realistically, some assets are likely to deliver stronger long-term returns than others in the years ahead, so its important that you invest your money wisely. With that in mind, heres a look at why Id avoid gold, bitcoin, and buy-to-let as we kick off the new decade, and where Id invest 20k instead.

Gold

While gold can be effective as a hedge against uncertainty, I wouldnt want to invest a large chunk of money in the precious metal. The main reason I say this is that gold doesnt generate any earnings or income. As Warren Buffett says, gold doesnt do anything but sit there and look at you.

Sure, the gold price could keep rising in 2020. But it could just as easily fall if sentiment towards the yellow metal deteriorates. Just ask those who bought gold in 2011 and are still sitting on losses today.

Cryptocurrencies

While many people believe that cryptocurrencies such as Bitcoin are a ticket to riches, personally, Im not convinced. Not only are cryptocurrencies impossible to value and notoriously volatile, but theres now also a great deal of regulatory uncertainty in relation to the asset class. Major regulators such as the Financial Conduct Authority (FCA) and the US Securities and Exchange Commission (SEC) are cracking down hard on crypto-assets. Ultimately, as a long-term investment, cryptocurrencies are unproven so Id leave them alone.

Buy-to-let

In the past, buy-to-let property was an easy way to make money. However, in my view, that ship has sailed. For starters, house price growth has stalled. And with Brexit uncertainty lingering, I think lower house price growth could persist for a while.

Secondly, the government has really cracked down on buy-to-let recently. Stamp duty surcharges have been introduced while mortgage interest tax relief has been phased out. Additionally, theres now a heavy weight of regulation that you have to deal with as a landlord. All things considered, buy-to-let now looks far less attractive than it used to.

How Id invest 20k this year

So, how would I invest 20k as we start the new decade?

Personally, Id put my money into the stock market. More specifically, Id invest in two main types of stocks:

  • High-quality FTSE 100 dividend stocks that have attractive long-term growth prospects, such as Unilever, Diageo, and Prudential, in order to create a passive income that grows every year

  • Internationally-listed growth stocks such as Apple (Warren Buffetts top stock), Microsoft, and Google, as well as smaller UK companies such as Boohoo for capital gains

Of course, Id invest my capital within a Stocks and Shares ISA (which has an annual allowance of 20,000) so that all my gains are entirely tax-free. And Id drip-feed my money into the stock market over time, to reduce the risk of investing at market highs.

Ultimately, I believe this two-pronged, tax-efficient approach, whichhas the potential to deliver a fantastic mix of capital gains and passive income over time, is the best way to achieve financial freedom.

Theres a double agent hiding in the FTSE

We recommend you buy it!

You can now read our new stock presentation.

It contains details of a UK-listed company our Motley Fool UK analysts are extremely enthusiastic about.

They think its offering an incredible opportunity to grow your wealth over the long term at its current price regardless of what happens in the wider market.

Thats why theyre referring to it as the FTSEs double agent.

Because they believe its working both with the market And against it.

To find out why we think you should add it to your portfolio today

Click here to read our presentation.


Should you drive forward with this UK stock or make an escape?

It is a cultural symbol; any James Bond fan will attest to that. When the chief executive says A Bond movie is always a boost to us, you know Aston Martin and the iconic movie franchise are joined at the hip. But CEO Andy Palmer can afford only a quiet chuckle at the trailer of an upcoming Bond movie, as I believe Aston Martin Lagonda Global Holdings (LSE: AML) has big problems facing it.

From the time the stock debuted on the London Stock Exchange in October 2018, it has never seen a price level higher than its listing at 1,900p. Its financial performance has been dismal as the company has struggled to generate profits on a quarterly basis. As of December 21, the stock is down 57% for the year; it saw its nadir at the end of October when it dipped below 400p. But since that time, the share price has been on a broad uptrend.

A new driver?

According to a report by Autocar, billionaire businessman Lawrence Stroll may be assembling a consortium to buy a large stake in Aston Martin. While Palmer, understandably, declined to comment, the stock price received a boost on hopes of a takeover. Though Stroll has an association mostly with fashion brands, he does have a foot in the auto business by means of owning Racing Point, a Formula 1 team.

Market participants were quick to point out the potential synergies that can be tapped between his team and Aston Martin, and the fact that his son Lance races for the team. It could be a good look for the luxury car maker and may breathe new life into the company.

On the other end of the spectrum were concerns regarding whether Stroll would be able to turn the ailing carmakers fortunes around. His lack of experience in the automotive business, as well as the fact that Aston Martin is the title sponsor for the Red Bull Racing team (which will be an issue if Stroll takes the former over at this time) were among the chief worries.

However, in general, stock markets were relieved that Astons share price was rising.

Get set Wait?

It is not a given that Stroll will take over Aston Martin. It is not even certain the extent to which stakeholders in the carmaker would be ready to cede control. At this juncture, the company is betting on its upcoming luxury SUV the DBX to turn its financial situation around.

If a stake sale does go through, it will relieve current shareholders of the company. But what about potential investors? Given the recent uptrend, it may be time to get in on the stock but in a measured manner. As per my understanding, there are not enough signs to go all in and buy the stock. However, there are some green shoots and in my opinion the price level of around 450-480p may present a compelling proposition to buy a small amount.

Thus, at this stage, I believe you may consider sitting in the passengers seat; the case for taking the drivers seat, though, is not compelling enough.

A Growth Gem

Research into unloved sectors can often unearth fantastic growth opportunities to help boost your wealth and one of Fool UKs contributors believes theyve identified one such winner, which could be a bona-fide bargain at recent levels!

To find out the name of this company, and to get the full research report absolutely free of charge, click here now.


Best shares for January 2020

Rupert Hargreaves: Aveva

Holding company Aveva (LSE: AVV) has produced outstanding returns for its investors over the past decade. Since the beginning of 2010, the stock has returned 16.8% per annum, outperforming the FTSE 100 by 9.3%.

It looks as if this trend is going to continue. City analysts are forecasting earnings growth of 194% for 2020, and growth of 12% for 2021. These estimates put the stock on a 2021 P/E of 38.1.

This multiple might appear expensive at first, but because Avevas engineering and process management software provides critical services for the companys customers, I think it is a premium worth paying. Customers tend to stick with the group for years as the cost of switching providers is just too high, and the risks are too great, which gives Aveva a substantial competitive advantage.

Fool contributor Rupert Hargreaves does not own shares in Aveva.


Roland Head: Barclays

The Barclays (LSE: BARC) share price is finally showing some momentum, after years of underperformance. But I believe this FTSE 100 bank remains cheap by most standards.

The shares offer a forecast dividend yield of 5.3% for 2020 and trade on less than eight times forecast earnings. Value investors might also be interested to note that the last-seen share price of c.180p represents a 30% discount to the banks tangible book value of 274p per share.

I expect Barclays shares to move closer to their book value in 2020 as trading continues to improve. I rate this unloved bank as a buy for value and income.

Roland Head has no position in any of the shares mentioned.


Andy Ross: AstraZeneca

Ahead of full year results coming out in February I think investors might pile into the high-flying pharmaceutical giant AstraZeneca (LSE: AZN). The share price did well in 2019 and investors will be expecting a positive update from the company.

The series of positive drug pipeline updates in 2019 seems unlikely to reverse anytime soon with new drugs being approved in China and the US in December.

With 164 drugs in its pipeline and with a strong focus on oncology I expect the group to do well in January and to keep its upwards trend going throughout the year.

Andy Ross owns shares in AstraZeneca.


Royston Wild: Shanta Gold

With gold prices having charged through the psychologically critical $1,500 per ounce marker in chirpy end-of-year business, the stage could well be set for more meaty gains in January, I reckon.

And what better way to play the gold bull run than by buying shares in Shanta Gold (LSE: SHG)? Its a bullion digger whose share price boomed around 55% in 2019, and yet one whose low forward P/E ratio of 6.8 times still suggests that its undervalued.

Shanta Gold isnt just a play on the strong metal prices of the moment, though, with accelerating production (which was up 15% in the third quarter at 22,726 ounces) giving extra reason for stock pickers to pile in today.

Royston Wild does not own shares in Shanta Gold.


Kirsteen Mackay: Sports Direct

In mid-December Sports Direct (LSE: SPD) shares rose 30% after it published its interim results for the six months to October 27. During this time sales rose 6% in UK sports retail, and 79% in its premium division which includes its House of Fraser stores. Net debt fell by almost 50%.

It also announced it is rebranding its business to Frasers Group (LSE: FRAS)in an effortto appear more upmarket. However, Sports Direct stores themselves will not change their branding. Owner Mike Ashley is also considering a 100m staff bonus scheme for full-time employees.

I think the Sports Direct share price will continue to rise in January 2020.

Kirsteen does not own shares in Sports Direct


Paul Summers: AG Barr

My first pick for 2020 is Cumbernauld-based beverage business AG Barr (LSE: BAG), the owner of brands such as Rockstar, Rubicon and, of course, Irn Bru.

Last year was one those already invested will want to forget. Shares plunged after sales came in lower than expected following managements decision to raise prices. Having traded sideways for a while now on reduced expectations, however, Im wondering if a recovery may be on the way.

Admittedly, the shares still arent cheap at 20 times forecast FY21 earnings but I think this can be justified based on the fat margins and returns on invested capital Barr has produced to date. A 3.1% yield means holders are being compensated for their patience.

Paul Summers has no position in AG Barr.


Kevin Godbold: Burberry

Branded luxury goods retailer Burberry (LSE: BRBY) has revitalised its product offering since it recruited Riccardo Tisci as its chief creative office in early 2018. New products now account for around 70% of the companys main-line retail store offering and the response from customers has been encouraging.

Revenue and earnings have been rising, driven by a savvy multi-media campaign. Meanwhile, the company has been rationalising its wholesale operation and refreshing retail stores in all major cities. Despite the forward-looking earnings multiple north of 20, I think new energy is infusing Burberry and, given its opportunities to expand in Asia and other countries, Id buy the shares for January and beyond.

Kevin Godbold does not own shares in Burberry.


Peter Stephens: Bovis

The prospects for housebuilders such as Bovis (LSE: BVS) continue to be relatively robust. High demand for new homes is being supported by government programmes such as Help to Buy that are expected to continue under Boris Johnsons leadership.

The company is making good progress in improving its build quality and customer satisfaction ratings. Its price-to-earnings (P/E) ratio of 12.4 suggests that it offers a wide margin of safety, while a dividend yield of 7.6% is set to catalyse its total returns. Brexit-related risks may hold back its short-term share price performance, but its long-term outlook seems to be positive.

Peter Stephens does not own shares in Bovis.


Tezcan Gecgil: Mondi

Paper and packaging groupMondi (LSE: MNDI) might be one of the lesser-known FTSE 100 companies. Yet with operations across more than 30 countries and multiple industries, it manages forests, produces pulp, paper and plastic films. And it offers industrial and consumer packaging solutions as well as sustainable packaging products worldwide. For example, in August its SizeMeMailer won an industry award for reducing environmental footprint for online shopping.

Im willing to bet that the growth in eCommerce, especially during the festive period in the final weeks of 2019, will likely benefit Mondi shares in the coming months. The market values the firm at about 8.65bn a solid market capitalisation. At present, the business provides investors with a robust 3.9% dividend yield and the share price of 1,785p throws up a forward P/E ratio just over 12.

Tezcan Gecgil does not own shares in Mondi.


Edward Sheldon: Tritax Big Box Reit

My top stock for January is FTSE 250 property company Tritax Big Box Reit (LSE: BBOX), which owns a portfolio of strategically-located warehouses that are let out to online retailers.

The reason I like Tritax Big Box is that the company is well placed to benefit from the growth of e-commerce. With more and more consumers shopping online, retailer demand for strategically-located logistics warehouse space is rising, which is good for real estate companies that operate in this niche area.

BBOX shares currently trade on a P/E ratio of around 21 and offer a dividend yield of approximately 4.6%. Those metrics are attractive, in my view.

Edward Sheldon owns shares in Tritax Big Box Reit


Tom Rodgers: SDI

SDI (LSE: SDI) is on a great growth spurt and theres plenty more upside to come, in my opinion. The Cambridge digital imaging firm posted another stellar set of results in December, with earnings per share up 28%, operating profits 41% higher and overall revenue climbing 42% to 11.45m.

A strong management team are accelerating acquisitions: the 4.3m buyout of profitable gas flow manufacturer Chell Instruments was a particularly sound move to grow earnings in 2020.

A trailing P/E ratio of 34 drops to 27 looking to next year because of these booming earnings and I think SDI will continue to outperform.

Tom Rodgers owns shares in SDI.


Manika Premsingh: Associated British Foods

The FTSE 100 conglomerate Associated British Foods (LSE: ABF) released a positive trading update in early December. For a consumer goods company with significant interest in retail; I think this is a win that cant be overlooked. While Primark is expected to show a small slip-up for the full year, its still expanding internationally.

ABF also expects gains for its food business. But its share price hasnt responded much to the update; in fact, it rose far more sharply to the election results. I reckon that it will rise further as investors search for bargains at a time when share prices of quality companies have already run up quite a bit in the past weeks, making ABF my top share for January.

Manika Premsingh has no position in Associated British Foods.


5 Stocks for Trying To Build Wealth After 50

Right now, TheMotleyFoolUK is giving away an exceptional investment report outlining our 5 favourite stocks that could form the foundation of a great portfolio, and, that might be of particular interest to investors over 50… so if youre aiming to get your finances on track and youre in or near retirement you wont want to miss this!

Help yourself to all 5 shares that were expressly recommending for INVESTORS aged 50 and OVER. To claim your FREE copy, simply click the link below right now.

Click Here For Your Free Report!


Femi Ogunshakin Managing Director
I hope you've enjoyed visiting our website. Let me know if there’s anything either me or one of my colleagues can do to help by completing the form below and clicking the send button.