LONDON — I used a market statistics package to find the FTSE 100 companies that were most recommended as “buys” among professional market analysts. Here are three shares that they are in love with.
MELROSE INDUSTRIES PLC
Melrose is a conglomerate that has grown through the acquisition and sale of industrial and manufacturing companies. It first came to the market in 2003. Since then, it has grown from a company with a 13 million pound market capitalization to being a member of the FTSE 100 index today.
The confidence that the analyst community has in Melrose’s management has inspired a swathe of buy recommendations on the stock.
Earnings per share (EPS) is forecast to grow 8.5% during 2013, meaning that the shares trade on a forward price-to-earnings (P/E) ratio of 13.7 times expectations. The dividend is also expected to rise by just over 6%. That equates to a value that is in line with the average for a FTSE 100 company.
Diversified mining company Rio Tinto plc (ADR) (NYSE:RIO) is forecast to increase EPS by 13% for 2013, followed by an 11.9% rise in 2014. Despite this optimism, the shares today trade on just 9.4 times the 2013 forecast, falling to 8.4 times for 2014.
The market’s enthusiasm for the shares seems to have inspired a more than 20% rally since the beginning of December. The dividend yield on the shares is expected to reach 2.9% for 2013, rising to 3.3% for 2014.
The shares look like an excellent way to gain exposure to the mining sector while still receiving income.
Shire PLC (ADR) (NASDAQ:SHPG)
Shire is a pharmaceutical company with a strong presence in the ADD (Attention Deficit Disorder) market.
Shire has delivered the kind of growth that its larger peers GlaxoSmithKline plc (ADR) (NYSE:GSK) and AstraZeneca plc (ADR) (NYSE:AZN) can only dream of. Between 2006 and 2011, EPS increased more than threefold. In the last five years, dividends at the company have increased by an average of 13.2% per year.
Shire is expected to report a 27.5% increase in EPS for 2012, followed by another 9.3% rise for 2013. The shares trade on a 2013 P/E of 14.2 times earnings.
Although Shire is a great example of a growth company on the market today, our analysts here at The Motley Fool think that they have found an even better opportunity. Although the company in question is long established, it is quickly moving to take a leading role in new markets.
The article 3 FTSE 100 Shares That the Market Loves originally appeared on Fool.com and is written by David O’Hara.