9th June 2014
With the Queen’s ‘official’ birthday being marked this month, (following her actual birthday on 21 April) we examine five ‘Best of British’ stocks as tipped by analysts at The Share Centre…
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Established in 1856, iconic British luxury brand, Burberry famous for its distinctive check design sells a selection of clothing, accessories, beauty, fragrance and home ware products. As a result of the slowdown in emerging markets, especially in China, the luxury goods market has been enduring a more challenging environment of late and over the last year, the stock has only edged up by 5%. Investors will be keen to see how new chief executive, Christopher Bailey, who took over from Angela Ahrendts after she left to become the retail boss at tech behemoth Apple, is taking the company forward. The fashion house has overhauled its strategy and has become less dependent on discounts at department stores, in favour of fully priced goods in a bid to increase the exclusivity of the brand. Helal Miah, investment research analyst at The Share Centre asserts that on top of this, the group’s online offering and social media presence is improving brand awareness amongst “younger tech savvy consumers”. He says: “Investors will acknowledge that recent trading updates have shown that so far this seems to be step in the right direction.”
British multinational oil and gas giant BP, is one of the six oil and gas ‘super-majors’ in the world. Following the disastrous and well documented Gulf of Mexico oil spill analysts believe the group has made good progress in overhauling itself – a process it is still in the midst of whereby it is offloading low returning assets and investing more in higher growth opportunities. While 2013 was a fairly disappointing year for the sector with most of the oil majors suffering from weak refining conditions and a small decline in average energy prices Miah urges that investors should note that BP still remains on the recovery path as production is set to increase. Over the past year the shares are ahead by 10%.
Back in the fashion world Mulberry, which is updating the market this week has suffered of late with its shares down by 31% over 12 months. But analysts have not been put off and the general sentiment is pointing to a ‘hold’, helped partly by a stabilisation of the stock which is 8% better over the past three months. The core of the FTSE AIM 50 constituent is the design, manufacture and retailing of primarily luxury ladies handbags. A core selling point of the brand is its heritage of “English craftsmanship” and that the products are made at the firm’s factory in Somerset notes Miah, adding that with a host of new store openings in key locations, the retail operations have experienced good growth rates in the last year. Miah says: “However, as the company experiences tougher times, the new management are looking to take a more measured approach to new store openings, in the hope of allowing existing stores to gain more traction and control costs. Investors should be reassured that the company is still pursuing international expansion and has reassessed its strategy by also introducing slightly more affordable ranges.”
Arguably more associated with prestige automobiles, the firm actually sold the car division back in 1980 but kept the rights to the brand name. Today, among other interests the business powers both military and civil aircraft. While the group has endured a 7% fall in the value of its stock over the last year, it has overall done well in recent times and the shares are presently in ‘buy’ territory, by broker consensus. Areas which have helped progress include not only initial sales of engines and drive systems but also with after sales contracts for repairs and maintenance. The shares have reflected the strong earnings momentum of recent times after rocketing by 223% in the past five years. Given the recent restructuring, its long term service contracts, prospects for its marine division. Miah anticipates that growth looks set to improve.
Marks and Spencer
After starting life as a Penny Bazaar on a stall at Birkenhead open market, Marks & Spencer has come a very long way. Although Miah highlights that it has had a tough few years – the past 12 months has only witnessed the shares move 2% higher – he notes that investors will hope the launch of its affluent ‘Best of British’ collection, which celebrates the UK’s “beautiful rich heritage and modern luxury”, will boost their clothing sales further. He adds: “The food division also performed well, considering Easter this year falls outside of its Q4 results. With online and international operations continuing to show good gains, M&S is starting to get results from tackling its problems in women’s wear and general merchandise.”
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