10th February 2015
With Valentine’s Day approaching, Ian Forrest, investment research analyst at The Share Centre, suggests three stocks for investors to snog, marry and avoid…
Snog – Amec Foster Wheeler
For those Casanova’s who are easily charmed, consulting, engineering and project management services provider Amec Foster Wheeler, could be the stock for you. We recommend the company as a ‘buy’ as the plunge in the oil price has sent the shares down to a very attractive valuation level. However, as a result the risk level has gone up and it could remain volatile.
The company’s customers span both the private and public sector and the move by the group to enhance its focus on emerging markets has been welcomed by analysts. Acquisitions will be a key growth driver for the group in the longer term and therefore help it deliver the targeted 100p per share in earnings by 2015. However, investors must be aware that the fall in the oil price could result in oil companies investing less in capacity expansion and exploration, resulting in a knock on effect on contract awards to oil support services companies.”
Marry – Marston’s
If it’s time to settle down, brewing and pub retailing company Marston’s, could be your ticket to a happily ever after. The group,whichhas been transforming its establishments to franchise style pubs focused on food and drink, looks set to benefit as couples head out for a romantic meal on Valentine’s Day. The company saw strong growth over the key Christmas and New Year period and eight new locations are on track to open in the first half of this year. Investors should also note that sales and profit margins are both up compared to the same period last year.
We recommend Marston’s as a ‘buy’ for long term, medium risk investors. The continued transformation of the group and the steady strengthening of the UK economy are all positive signs for investors. Despite the total reliance on UK consumers slightly increasing the risk, the fall in the price of petrol may feed through to increased consumer spending.
Avoid – Coca Cola HBC
With trading conditions remaining difficult and several analysts lowering their forecasts for sales this year, cupid may currently want to shoot his arrow wide of Coca Cola. The companyis one of the world’s largest bottlers of Coca-Cola products but, in an increasingly health conscious world, more consumers are avoiding sugary drinks. As a result growth and sales have declined in both emerging and developed markets.
“Despite recommending the group as a ‘sell’, investors should note that there are some tentative signs of improvement in some markets and operating expenses continue to fall. However, overall trading conditions remain very difficult and these are not helped by adverse foreign exchange movements. Investors should wait to see much better growth, especially in emerging markets, before the shares become attractive.