Stocks more likely to make profit in footsie 100

[peter77]

So far I have not heard any one for Stocks more likely to rise in value and make profit in 2018.

My own view is that Footsie won't go far this year. If not crash but stay 5% to 10% in the range ,what it is at the moment.

My own recommendation for this year for stocks is

1. Legal & General  

2. Sophos

3  GSK

Number 1 & 3 is also more for the Dividends And No 3 is more for the future danger of Cyber attacks

I would like to hear from others their views .

Peter77

[rimmy2000]

Peter,

 

its good to hear some suggestions. For LGEN I note this has a yield of 5.3%, which seems reasonable. I looked at a FTSE 100 table and this yield makes LGEN the 12th highest paying FTSE100 stock, based on this value. Interestingly I hold Imperial Brands, which is the 11th highest payer at 5.4% and I too bought this for the yield alone, so in a sense we have both reached the same decision. With IMB I am expecting capital growth over the next 12 months because a) it is a defensive stock and b) the price has come down from a high of around £41.30 reached in 2017. I expect this correction to be reversed and IMB are investing in new products to protect their market share.

 

I don't however know much about Legal and General!

 

In respect of Sophos, this is not a FTSE100 constituent so not sure if that affects your decision making (it initially looked like you were trying to identify FTSE100 stocks to out perform the index?) I don't know much about it except the stock has roughly doubled over the last 12 months, so it would be a great feat if it were to do that again. (Do you know anything about the company its prospects or its products, btw?) it is on a very punchy rating of f/c PER 121 which is roughly akin to OCADO - a stock that is widely believed to be over-valued. I suppose largely it depends if SOPHOS can meet its profit targets for the year. This only pays 0.6% yield, so I would not be buying it for income, and for me the rating is too punchy to justify buying it now, without doing more research. Perhaps you can write up some notes?

 

In terms of GSK, I do partially resonate your thinking, and in a similar vein to LGEN, this could be a good buy for the yield of 6.1%, but perhaps with a bounce in the share price too. Perhaps there is M&A potential here?

I have held this share before, and given the three you picked then GSK would be my preference as the dividend yield is the highest of the three with some chance of share price growth too.

(note the cover is < 1 so is there a risk the dividend could be cut or frozen?)

 

You may want to plot these shares again the FTSE100 and see how they have tracked it, re-basing for say two years.  There is a good piece of work that could be undertaken here.

 

 

 

 

[peter77]

Rimmy2000

Thanks for your reply. I like your suggestions.

Peter77

[rimmy2000]

Hi  I found this piece on LGEN and thought you may be interested https://www.hl.co.uk/shares/five-investment-ideas-2018

 

Rgds