Do you believe in the wisdom of crowds? At the Fool, weve generally made a virtue of going against the crowd, as exemplified in Warren Buffetts famous quote be greedywhen others are fearful, and fearful when they are greedy. You may also try to shun the crowd but you still cantignore it.
The ShareCentre has just named the top five popular Isastocks among its crowd of investors. You probably wont be surprised by the results, well maybe one of them will deliver a jolt!
Inwith a bullet at number one is pharmaceutical giant GlaxoSmithKline (LSE: GSK), possibly the FTSE 100s favourite long-term buy and hold. Glaxo has stretched our patience lately thanks to the Chinese bribery scandal, expiringpatents and concern about itsdrug pipeline. The stock is actually down 12% over the past year butit does now trade at just 7.86 times earnings, while offering a juicier-than-usual yield of 5.86%. The Share Centre reckons its pipeline of new drugs, diversification across consumer healthcare as well as biotechnology, and increasing exposure to emerging markets makes it a buy and the crowd goeswild.
Royal Dutch Shell
Oil giant Royal Dutch Shell (LSE: RDSB) has had an even more torrid year, falling 22%, but its up 16% in the last month andif the oil price revival continues you can expect more of that. The yield remains in peril although management will fight tooth and nail to retain it, and again, pricier oil will help. It isnt often that a companys yield matches its P/E ratio, but both are hovering around 7.5% today. If you want to play the oil price rebound, it may be time to join the crowd.
Lloyds Banking Group
I love Lloyds Banking Group (LSE: LLOY) so much I named it my stock tip for 2016, and in this case I dont mind running with the crowd. The share price is fighting back after getting caught up in the January sell-off as investorsanticipate aforecast yield of 6.5% for December 2017. The slowing domestic economy may knock this UK-focused retail bank but that shouldnt deterinvestors who should be looking to hold this stock for decades.
I was surprised to see troubled mining giant Glencore (LSE: GLEN) flying high in fourth place but it only goes to show theres no such thing as bad publicity. After last years travails, the stock is up a crowd-pleasing 71% in the last month but dont buy and expecta repeat performance in March. The commodities rally may be spent for now, as the reality of a slowing China reasserts itself. Expect more volatility to come.
Investors cantshake their oil addiction with BP (LSE: BP) revving itsengines at number five. Itcurrently yields a gushing7.28% but it remains at riskwith netdebtsoaring from $22.6bn to $27.2bnover the last year and the world swimming in a glut of black gooey stuff. The Share Centre hails it as a buy as management slashes costs to survivecheap oil. The truth is that where the oil price leads, BP will follow. So where will oil go next? Nocrowd on earth can answer that.
Most of these big names are trading at tempting valuations due to the recent share price sell-off. Buying at times like these is just one way you can make serious money from the stock market, and there are other strategies that can help.
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Harvey Jones has no position in any shares mentioned. The Motley Fool UK has recommended GlaxoSmithKline and Royal Dutch Shell B. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.