My 3 Picks For 2014: Centrica PLC, Ferrexpo Plc and Glencore Xstrata PLC

Centrica PLC (LON:CNA), Ferrexpo Plc (LON:FXPO) and Glencore Xstrata PLC (LON:GLEN) are my picks for 2014.

| 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.

2013 was one of the best years on record for stock markets around the world. Indeed, the FTSE 100 is now sitting within millimetres of its all-time high. Still, in my opinion there are plenty of shares that look attractive, even in this strong market, and you don’t have to look that hard to find them!

Unloved but essential

My first pick is unloved Centrica (LSE: CNA)  (NASDAQOTH:CPYYY.US). Recent political statements have weighed on the utility sector and Centrica’s share price, like that of its peers has suffered. However, while the outlook for utility companies here in the UK may be cloudy, to outlook is clearer overseas and this is where Centrica is focusing its efforts for growth.

For example, the company has been welcomed with open arms in the US by both customers and regulators. In addition, Centrica is growing within Ireland where it is the preferred bidder for the retail arm of Ireland’s state gas company.

What’s more, Centrica is also pulling the plug on many UK projects, due to increasing amounts of red tape and rising costs. This should allow the company to refocus its efforts on growth overseas, where Centrica can drive profits higher without having to worry about political intervention.  

Iron ore

My second pick is Ferrexpo (LSE: FXPO). Ferrexpo is a low-cost iron ore producer, and the company recently reported that it was mining iron ore for a cost of less than $60 per tonne. With iron ore currently trading at a price of around $130 per tonne on the open market, Ferrexpo’s profit margin exceeds 100% per tonne of ore mined.

Furthermore, the company brought a new mine into production last year and Ferrexpo’s management expect costs to drop further as this new mine reaches peak output. Nevertheless, Ferrexpo did not have a good 2013 and its share price is down nearly 30% since January last year but things look to be brightening up for the company. 

Cash-flow king

My final pick is commodities giant Glencore Xstrata (LSE: GLEN). Unlike the rest of the commodity industry, which has suffered from falling commodity prices, Glencore’s trading and marketing operations have helped cushion a downturn in the company’s traditional mining business.

What’s more, as Glencore remains profitable while peers struggle, the company has been able to use this to its advantage. Indeed, Glencore has been investing in floundering resource companies, picking up quality mining assets at low prices. Glencore is especially active in the oil and gas sector. 

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.

> Rupert owns shares in Ferrexpo. 

More on Investing Articles

Portrait of elderly man wearing white denim shirt and glasses looking up with hand on chin. Thoughtful senior entrepreneur, studio shot against grey background.
Investing For Beginners

After getting promoted from the FTSE 250, what’s next for Hiscox?

Jon Smith mulls over the latest reshuffle in the FTSE 250 and explains why he feels this top stock could…

Read more »

Investing Articles

Want dividend yields up to 9.9%? Here’s 3 FTSE 100 and FTSE 250 shares to consider

Looking to turbocharge your passive income? These high dividend yield FTSE 100 and FTSE 250 stocks could be just what…

Read more »

Investing Articles

2 shares absolutely crushing the FTSE 100 in 2024!

Not all FTSE 100 stocks are sleepy and meandering. This duo has surged more than four times higher than the…

Read more »

Silhouette of a bull standing on top of a landscape with the sun setting behind it
Growth Shares

The FTSE 100 could hit 9,000 points by year end. Here’s why

Jon Smith talks through some factors that could help to lift the FTSE 100 to a new all-time high and…

Read more »

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

I’d seriously consider buying this UK technology small-cap stock today

Today's positive trading figures and a runway of growth potential ahead make this small-cap stock look attractive to me now.

Read more »

Investing Articles

It’s October! Does this mean UK stocks are going to crash?

Whisper it quietly, but four of the five biggest one-day falls in the FTSE 100 have been in the month…

Read more »

Investing Articles

With new nuclear energy deals in view, Rolls-Royce’s share price looks cheap to me anywhere under £11.48

Rolls-Royce’s share price dipped after a problem on a Cathay Pacific flight but has now bounced back on positive news…

Read more »

Investing Articles

Is the Greggs share price now a screaming buy for me after falling 10% this month?

Harvey Jones watched the Greggs share price climb and climb, but decided it was too expensive for him. Should he…

Read more »