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.

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.

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

Investing Articles

5 growth stocks under £1 Fools believe will soar

Not all of these growth shares are penny stocks, since -- at the time of writing -- all their market…

Read more »

Investing Articles

Here’s how I’ve targeted a HUGE passive income with FTSE 100 shares

The FTSE 100 is home to scores of brilliant stocks for dividend investors to savour. Here's how I'm looking to…

Read more »

Investing Articles

Here’s the best-performing FTSE 100 stock of the last 10 years

Private equity firm 3i has outperformed the rest of the FTSE 100 over the last 10 years. And its big…

Read more »

Fans of Warren Buffett taking his photo
Investing Articles

Here’s why Warren Buffett is selling shares (and why I’m not)

Warren Buffett cited tax considerations as his reason for selling shares in Apple. But this isn’t something most UK investors…

Read more »

Investing Articles

What on earth is going on with the AstraZeneca share price?

The AstraZeneca share price has fallen 30% from its peak in August. Dr James Fox explains what’s going on with…

Read more »

Investing Articles

2 high-yield FTSE 100 shares I’d consider buying for passive income…and one I’d avoid

Some FTSE 100 stocks have eye-popping dividend yields. But will the passive income actually be dished out? Paul Summers takes…

Read more »

Smart young brown businesswoman working from home on a laptop
Investing Articles

These 2 former stock market darlings are trying my patience! Time to sell?

Harvey Jones thought he was getting a bargain when he snapped up these too much-loved FTSE 100 dividend growth stocks.…

Read more »

Investing Articles

Here’s how I’d use £3,000 to target a second income that grows each year

Our writer explains the approach he'd take to trying to build a second income that gets bigger over time, by…

Read more »