LONDON — Some private investors won’t give professional fund managers the time of day. Not me. In fact, I follow eight pros closely. My Expert Eight are proven bottom-up stock pickers, who generally invest on a long-term view and have their own money invested in their own funds.
The way I see it, I’ve got eight hot analysts throwing their best investment ideas at me. I’ve highlighted a number of these ideas for you over the past couple of years, and I’ve got three more for you today.
Lloyds Banking Group PLC (ADR) (NYSE:LYG) and BG Group plc (LON:BG) have both featured previously, while fellow FTSE 100 company Aggreko plc — the world’s largest temporary power generation supplier — is a brand-new stock idea.
Before getting down to what our experts have to say about these companies, the following table shows the performance of the blue-chip opportunities I’ve highlighted for you previously.
| Company | Highlighted Share Price (pence) | Recent Share Price (pence) | Gain/(loss) | FTSE 100 Gain/(loss) |
|---|---|---|---|---|
| ARM Holdings | 506 | 940 | 85.8 | 13.6 |
| BG Group | 1,252 | 1,142 | (8.8) | 19.7 |
| BG Group | 1,000 | 1,142 | 14.2 | 12.9 |
| British Sky Broadcasting | 692 | 828 | 19.7 | 8.1 |
| British Sky Broadcasting | 745 | 828 | 11.1 | 12.9 |
| Carnival | 2,013 | 2,505 | 24.4 | 8.1 |
| Lloyds Banking Group | 23.6 | 54.7 | 131.8 | 16.8 |
| Rio Tinto | 3,389 | 3,733 | 10.2 | 19.7 |
| Rio Tinto | 3,096 | 3,733 | 20.6 | 16.8 |
| Rio Tinto | 2,934 | 3,733 | 27.2 | 12.9 |
| Smiths Group | 965 | 1,238 | 28.3 | 19.7 |
| Standard Chartered | 1,485 | 1,718 | 15.7 | 7.0 |
| Average | 31.7 | 14.0 |
Bank on recovery
Veteran blue-chip stock picker Richard Buxton (Schroder UK Alpha Plus) plays the long game. For some time, he’s been bullish on banks and miners to lead a general recovery.
It might seem strange to be highlighting Lloyds today after the stunning 132% gain since I brought it to your attention at 24 pence in December 2011, but let’s go back a further six months to May of that year.
Buxton told Citywire: “We don’t see why the market wouldn’t pay 1.5x book value if the banks get back to mid-teen ROE [return on equity] and Lloyds could well double on a three to four-year view.”
Lloyds’ shares were then trading at the same kind of 50-something-pence level as today. Many analysts — and Lloyds itself — now expect ROE will get into the teens more or less on Buxton’s time frame, while book value can also be expected to start to rise again in due course. As things stand, 1.5 times the most recent book value gives a share price of 89 pence. Lloyds continues to be the largest holding of several banks Buxton has backed.
Brazil bonanza or bid
Mark Sheppard (Manchester & London Investment Trust) sees good value in BG Group, despite some downward revisions to the company’s production targets that have led to the shares falling more than 20% over the past year compared with an 8% rise in the FTSE 100.
