25th March 2014
The Share Centre has added St James’s Place and, perhaps more surprisingly supermarket Sainbury’s to its buy list. The broker says that the recent budget announcements are positive for St. James’s Place.
It adds that Sainsbury’s market share growth has been impressive in difficult conditions. Sheridan Admans, investment research manager says: “As St. James’s Place enters the FTSE 100 we recommend it as a ‘buy’ for investors, as the improving UK and global economic backdrop should continue to give the company momentum. Announcements in the recent Budget on ISA and pension investing in the UK are positive for the group.
“Potential expansion into Asia, where it should benefit from the growing middle class, could see gains for St. James’s Place. However, investors should be prepared for a pullback in the share price if the acquisition doesn’t happen.
“St. James’s Place again delivered on its promise to increase its dividend significantly for the fifth successive year, giving investors’ confidence on its 2014 outlook to return a further increase of 30-40%.
Thirteen brokers out of sixteen recommend SJP as a strong buy with three neutral on Digital Looks.
On Sainsbury’s, Admans adds: “With the backdrop of an improving economy we have added Sainsbury’s to the ‘buy’ list for contrarian investors. The sector has been going through a torrid time, with major UK brands suffering from fierce competition from discounters, however, its market share growth has been impressive in difficult conditions. The retailer has a strong brand and management track record and offers investors an attractive dividend.
“Following the dramatic decline in share price in recent months we believe it currently offers an attractive entry point. Investors considering buying into the stock should drip feed while short-term headwinds die-out.”