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St Leger’s Day stock picks from The Share Centre

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Written by:
11/09/2014
Helal Miah, investment research analyst at The Share Centre, offers three stocks for investors that following the old adage of selling in May, going away and coming back on St Leger Day.

GlaxoSmithKline – low risk

“The defensive nature of the sector and the stock, and the competitive yields paid to investors, make this a core holding for many portfolios and why we recommend it for low risk investors. GlaxoSmithKline is very cash generative and is committed to using this towards increasing dividends, share buybacks and bolt-on acquisitions. One of the key attractions of the business over other large pharmaceuticals is the promising pipeline of drugs coming through R&D. The group also remains focussed on reducing costs, new manufacturing processes and a major change programme, which is expected to save £1bn a year by 2016. The hope for future improvement should be helped by new products, diversification in consumer healthcare and biotechnology and increasing exposure to emerging markets.”

RPC – medium risk

“Whilst RPC may not be a well-known brand for investors the names it supplies plastic packaging to certainly are, including Nivea cream and Dulux paint. The group’s wide range of packaging products across many different sectors provides good diversity and exposure to a number of consumer markets. The company’s recent move into the fast growing Asian markets, the streamlining of European operations and strong dividend policy are all attractive for investors looking for a mixture of income and growth. We recently added RPC to our ‘buy’ list for medium risk investors seeking a balanced investment. The poor economic backdrop in Europe and imminent prospect of rising UK interest rates may weigh on the shares. However, we believe they offer good value at this level, having dipped from a recent record high-point in June.”

Randgold Resources – high risk

“Randgold Resources is a pick for higher risk investors looking for an investment that is a play on the price of gold. The company has been ramping up production consistently to record levels, while expansion and exploration seem to be progressing well. It produces gold at a relatively lower cost compared to most of its peers. However, as its principal operations are in Mali, a country with significant levels of political instability, this is not for the faint-hearted. The recent tensions have impacted confidence in the company’s share price, but the operations on the ground remain largely unaffected.”

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