3 Hot Picks For March? Aviva plc, London Stock Exchange Group Plc And Gulf Marine Services PLC

Are Aviva plc (LON: AV), London Stock Exchange Group Plc (LON: LSE) and Gulf Marine Services PLC (LON: GMS) all set for great results?

| 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.

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.

On 4 March, the London Stock Exchange (LSE: LSE) itself is due to report, though the results might be a little overshadowed by the news on 23 February that the firm is in merger talks with its German counterpart, Deutsche Börse. Since the announcement, the shares have spiked up 17% to 2,694p — and we’ve now seen a gain of 27% since the stock’s recent low on 9 February.

The LSE’s earnings have been growing steadily since the recession, and there’s another 12% growth expected for the year just ended — followed by 9% forecast for this year and 15% for 2017. The shares are on a relatively high P/E of nearly 24 for the year just ended, and that would only drop to 19 by 2017, which is some way ahead of the FTSE 100 average of a little under 14. And dividend yields of only around 1% to 1.5% are way below the market average.

But the City’s analysts are very bullish about the company, presumably because growing economic strength and a return to company growth should provide a nice long-term boost for the LSE.

The best insurer?

Then on 10 March we should have 2015 results from Aviva (LSE: AV).

The full year is expected to bring an 18% drop in EPS, but it should be accompanied by a 4.7% dividend yield. The shares have lost 19% over the past 12 months to 436p, putting them on a P/E of 11. Forecasts for this year suggest a 17% rise in EPS and a dividend boost to 5.5%, with a further 10% growth in EPS and a 6.3% yield pencilled-in for 2017 — and those would give us P/E multiples of 9.5 and 8.5, respectively.

Aviva’s Q3 update, after the acquisition of Friends Life, told us of a 25% rise in new life insurance business with more than £2.2bn in net inflow in the nine months, with the firm’s general insurance and asset management divisions also doing well.

With chief executive Mark Wilson speaking of “maintaining the momentum of Aviva’s transformation with a further quarter of improved performance“, would I buy the shares? Yes, I would (and did).

An oil outsider

Thirdly, I have an intriguing prospect in Gulf Marine Services (LSE: GMS), which is set to report on 22 March. The shares are down 54% since their April 2014 peak, to 74p, so what’s the story?

Gulf Marine supplies things called jackup barges, which I believe are essential bits of kit in the offshore oil extraction business, and the oil price slump leading to the shelving of so many prospects has seriously damaged sentiment towards the firm. Perhaps unsurprisingly, there’s a 30% drop in EPS expected for the year just ended. But I think investors could be missing an opportunity here.

Gulf Marine might not be supplying much new kit, but it’s still making decent profits from maintenance work — and there’s a return to earnings growth forecast for 2016. And here’s the killer — the shares are on a P/E of only 4.5 based on 2015 expectations, dropping to a mere 3.7 on 2016 forecasts!

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.

Alan Oscroft owns shares in Aviva. The Motley Fool UK has no position in any of the shares mentioned. 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

Close up of manual worker's equipment at construction site without people.
Investing Articles

Investing £14,708 in this FTSE 100 stock could earn me £1,000 per year in passive income

Is a CMA investigation into anticompetitive practices the cloud cover Stephen Wright needs to start buying shares in a FTSE…

Read more »

Investing Articles

Despite rising 152% in a year, is Rolls-Royce’s share price still a bargain?

While Rolls-Royce’s share price has shot up recently, it still looks very undervalued against its peers, and the business looks…

Read more »

Investing Articles

Could Nvidia stock be a bargain in plain sight?

Nvidia stock has surged 252% over the past 12 months, but that doesn't mean it's expensive. In fact, it may…

Read more »

Investing Articles

Here’s why I think the Vodafone share price should be 110% higher

Reflecting on speculation, our writer believes there’s a case to be made for the Vodafone share price being more than…

Read more »

A pastel colored growing graph with rising rocket.
Investing Articles

Is this dividend star also the best bargain in the FTSE 100?

This FTSE 100 stock pays a whopping 8%+ yield, looks very undervalued against its peers, and is set for stellar…

Read more »

Investing Articles

2 FTSE 100 stocks. One sublime, the other ridiculous

Our writer doesn’t understand the appeal of Ocado. But looking at the grocer’s latest results makes him see the attraction…

Read more »

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 Articles

Down 18% in a year, what’s next for the Greatland Gold (GGP) share price?

The Greatland Gold share price has disappointed over the past 12 months. Our writer asks whether the company’s latest update…

Read more »

Investor looking at stock graph on a tablet with their finger hovering over the Buy button
Investing Articles

With 30% annual returns for a decade, I’m buying this for my Stocks & Shares ISA

Oliver Rodzianko has been looking for a new investment for his Stocks and Shares ISA. Here's one he's decided is…

Read more »