Its rumoured David Camerons a bit busy at the moment. I dont suppose hes looking at stocks for his investment portfolio, but there are plenty of interesting opportunities out there.
Here are the reasons (some serious; some a little less so!) why I think Mr Cameron and you might want to consider buying shares in GlaxoSmithKline (LSE: GSK), BP (LSE: BP), Vodafone (LSE: VOD), HSBC (LSE: HSBA) and Burberry (LSE: BRBY).
Mr Cameron formed a Business Advisory Group when he got into Downing Street five years ago. Membership of this select group is by personal invitation, and the Prime Minister considers members to be some of Britains leading business men and women.
Andrew Witty, chief executive of GlaxoSmithKline, is one of the chosen few, so it would seem logical for Mr Cameron to consider buying shares in the pharmaceuticals giant. The company has been battling through a period of patent expiries on some of its leading products. But, with earnings expected to start picking up again next year, and a dividend yield of over 5%, GSK seems an attractive investment, particularly for those seeking income.
Mr Cameron, who waded into battle on behalf of BP after the Gulf of Mexico oil spill in 2010, has now told the company that the UK government would resist any potential foreign takeover of the business.
The Financial Times observed: BP shareholders have paid for the right to determine the companys future. The government has not. The FT has a point. Perhaps now would be a good time for Mr Cameron to buy some BP shares. He could be getting a good deal, too, because the shares, which yield 5.5%, are over 10% below their 52-week high, and could deliver strong returns when the oil price moves higher from its current subdued level.
Mr Cameron seems to like Vodafone. Perhaps the fact that Vodafone UKs headquarters is in his childhood hometown of Newbury has something to do with it. Weve seen him popping into HQ to congratulate this great British success story for creating new jobs, throwing his weight behind the company in a dispute with the Indian government over a tax liability, and telling us hes a customer of Vodafone, despite the poor signal he gets when holidaying in Cornwall.
Furthermore, Vodafone chief executive Vittorio Colao is another member of Mr Camerons elite Business Advisory Group, and Vodafone is another blue-chip giant currently yielding over 5%.
Mr Camerons forebears have a long history in finance, but which financial stock would be an appropriate selection for his portfolio. His father, grandfather and great-grandfather were all partners in stockbrokers Panmure Gordon, but this AIM-listed company is a bit on the small side. A great-great-grandfather was the director of the Chartered Bank of India, Australia and China which later became Standard Chartered, but this bank is struggling and in the midst of boardroom changes.
Another of Mr Camerons great-great-grandfathers was the London head of the Hongkong and Shanghai Banking Corporation, now HSBC. The UKs only truly global bank, HSBC seems good value on a low price-to-earnings ratio and with a dividend yield of 5.3%.
Mr Camerons wife, Samantha, is an ambassador for the British Fashion Council, and is often seen dressed head-to-toe in the best of British labels. Investors who buy a minimum of 250 shares in luxury handbags firm Mulberry are entitled to a 20% discount on up to 5,000 of product per annum. However, the company issued a string of profit warnings last year, and has seen more than its fair share of upheavals and boardroom changes over the years.
Iconic British fashion house Burberry appears a safer bet. While it doesnt boast the shareholder perks of Mulberry, or the high yields offered by GlaxoSmithKline, BP, Vodafone and HSBC, Burberry has been growing earnings faster than many companies. City analysts are expecting double-digit annual increases for the next two years.
Finally, Mr Cameron may be too busy with other things at the moment, but here at the Motley Fool we’re always on the campaign trail to get Britain investing better. If you’re looking to enhance your investment returns, you’ll need to back some of the big winning stocks of the future, and the Motley Fool’s crack team of analysts know exactly how to go about it.
In this exclusive FREE report, our market-beating experts explain how seven strategic steps and just 20 minutes a month could help towards turning YOU into one of Britain’s growing number of “surprise” millionaires.
This free report comes with no obligation — simply click here now.
How To Get Started With Small-Caps
Investing in a handful of cracking small-cap companies could bag you much bigger returns than a stodgy set of blue-chip stocks and may make a smart addition to your existing portfolio if you can handle a little more risk.
To help get you started, The Motley Fools Head of UK investing has prepared this special small-cap report featuring one fast-growing stock idea that he believes has breath-taking potential.
G A Chester has no position in any shares mentioned. The Motley Fool UK has recommended Burberry, GlaxoSmithKline and HSBC Holdings. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.