5 Stocks David Cameron Should Consider Buying: GlaxoSmithKline plc, BP plc, Vodafone plc, HSBC Holdings plc & Burberry Group plc

Why David Cameron should be looking at GlaxoSmithKline plc (LON:GSK), BP plc (LON:BP), Vodafone plc (LON:VOD), HSBC Holdings plc (LON:HSBA) and Burberry Group plc (LON:BRBY).

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

It’s rumoured David Cameron’s a bit busy at the moment. I don’t suppose he’s looking at stocks for his investment portfolio, but there are plenty of interesting opportunities out there.

Here are the reasons (some serious; some a little less so!) why I think Mr Cameron — and you — might want to consider buying shares in GlaxoSmithKline (LSE: GSK), BP (LSE: BP), Vodafone (LSE: VOD), HSBC (LSE: HSBA) and Burberry (LSE: BRBY).

GlaxoSmithKline

Mr Cameron formed a Business Advisory Group when he got into Downing Street five years ago. Membership of this select group is by personal invitation, and the Prime Minister considers members to be “some of Britain’s leading business men and women”.

Andrew Witty, chief executive of GlaxoSmithKline, is one of the chosen few, so it would seem logical for Mr Cameron to consider buying shares in the pharmaceuticals giant. The company has been battling through a period of patent expiries on some of its leading products. But, with earnings expected to start picking up again next year, and a dividend yield of over 5%, GSK seems an attractive investment, particularly for those seeking income.

BP

Mr Cameron, who waded into battle on behalf of BP after the Gulf of Mexico oil spill in 2010, has now told the company that the UK government would resist any potential foreign takeover of the business.

The Financial Times observed: “BP shareholders have paid for the right to determine the company’s future. The government has not”. The FT has a point. Perhaps now would be a good time for Mr Cameron to buy some BP shares. He could be getting a good deal, too, because the shares, which yield 5.5%, are over 10% below their 52-week high, and could deliver strong returns when the oil price moves higher from its current subdued level.

Vodafone

Mr Cameron seems to like Vodafone. Perhaps the fact that Vodafone UK’s headquarters is in his childhood hometown of Newbury has something to do with it. We’ve seen him popping into HQ to congratulate “this great British success story” for creating new jobs, throwing his weight behind the company in a dispute with the Indian government over a tax liability, and telling us he’s a customer of Vodafone, despite the poor signal he gets when holidaying in Cornwall.

Furthermore, Vodafone chief executive Vittorio Colao is another member of Mr Cameron’s elite Business Advisory Group, and Vodafone is another blue-chip giant currently yielding over 5%.

HSBC

Mr Cameron’s forebears have a long history in finance, but which financial stock would be an appropriate selection for his portfolio. His father, grandfather and great-grandfather were all partners in stockbrokers Panmure Gordon, but this AIM-listed company is a bit on the small side. A great-great-grandfather was the director of the Chartered Bank of India, Australia and China which later became Standard Chartered, but this bank is struggling and in the midst of boardroom changes.

Another of Mr Cameron’s great-great-grandfathers was the London head of the Hongkong and Shanghai Banking Corporation, now HSBC. The UK’s only truly global bank, HSBC seems good value on a low price-to-earnings ratio and with a dividend yield of 5.3%.

Burberry

Mr Cameron’s wife, Samantha, is an ambassador for the British Fashion Council, and is often seen dressed head-to-toe in the best of British labels. Investors who buy a minimum of 250 shares in luxury handbags firm Mulberry are entitled to a 20% discount on up to £5,000 of product per annum. However, the company issued a string of profit warnings last year, and has seen more than its fair share of upheavals and boardroom changes over the years.

Iconic British fashion house Burberry appears a safer bet. While it doesn’t boast the shareholder perks of Mulberry, or the high yields offered by GlaxoSmithKline, BP, Vodafone and HSBC, Burberry has been growing earnings faster than many companies. City analysts are expecting double-digit annual increases for the next two years.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

G A Chester has no position in any shares mentioned. The Motley Fool UK has recommended Burberry, GlaxoSmithKline and HSBC Holdings. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

Could the JD Sports Fashion share price double in the next five years?

The JD Sports Fashion share price has nearly halved in the past five years. Our writer thinks a proven business…

Read more »

Bus waiting in front of the London Stock Exchange on a sunny day.
Investing Articles

If interest rate cuts are coming, I think these UK growth stocks could soar!

Falling interest could be great news for UK growth stocks, especially those that have been under the cosh recently. Paul…

Read more »

Investing Articles

Are these the best stocks to buy on the FTSE right now?

With the UK stock market on the way to hitting new highs, this Fool is considering which are the best…

Read more »

Petrochemical engineer working at night with digital tablet inside oil and gas refinery plant
Investing Articles

Can the Centrica dividend keep on growing?

Christopher Ruane considers some positive factors that might see continued growth in the Centrica dividend -- as well as some…

Read more »

Smiling family of four enjoying breakfast at sunrise while camping
Investing Articles

How I’d turn my £12,000 of savings into passive income of £1,275 a month

This Fool is considering a strategy that he believes can help him achieve a stable passive income stream with a…

Read more »

Person holding magnifying glass over important document, reading the small print
Investing Articles

2 top FTSE 250 investment trusts trading at attractive discounts!

This pair of discounted FTSE 250 trusts appear to be on sale right now. Here's why I'd scoop up their…

Read more »

Smiling young man sitting in cafe and checking messages, with his laptop in front of him.
Investing Articles

3 things that could push the Lloyds share price to 60p and beyond

The Lloyds share price has broken through 50p. Next step 60p? And then what? Here are some thoughts on what…

Read more »

Young female business analyst looking at a graph chart while working from home
Investing Articles

£1,000 in Rolls-Royce shares a year ago would be worth this much now

Rolls-Royce shares have posted one of the best stock market gains of the past 12 months. But what might the…

Read more »