We asked our writers to share their top stock picks for the month of November, and this is what they had to say:
Rupert Hargreaves: Ocado
Usually, I am not interested in growth stocks with multi-billion pound valuations and almost no income. But when it comes to Ocado (LSE: OCDO), I’m prepared to make an exception.
Over the past year, Ocado has signed several technology-sharing agreements with major retailers, proving that it does have something other retailers want to buy. And I reckon the business is ripe for a takeover by a larger competitor.
Ocado’s fifth-largest shareholder, its partner Kroger, has been touted as the most likely bidder as it seeks to protect itself against the rise of Amazon. City analysts also believe Amazon itself could be a possible candidate. A bidding war between these two giants would only produce a positive result for investors.
Rupert Hargreaves does not own shares in Ocado.
Alan Oscroft: Caledonia Investments
I love the whole idea of investment trusts, and right now I’ve got my eye on Caledonia Investments (LSE: CLDN).
It provides exposure to a portfolio of top international stocks, while also going for smaller (often unlisted) companies with great growth potential — and then selling them for a nice return later. The dividend, though only yielding a little over 2%, has been lifted every year for the past 51 years.
To top it off, the shares are selling at a discount to NAV of more than 20%. Year-on-year earnings might be a little erratic due to the nature of the trust’s investment strategy, but that should be no problem for long-term investors.
Alan Oscroft does not own shares in Caledonia Investments.
Royston Wild: Croda International
Chemicals giant Croda International (LSE: CRDA) hasn’t managed to avoid the downpour that has swamped stock markets in recent weeks. I reckon upcoming third-quarter trading numbers slated for November 1 could provide the FTSE 100 share with some much-needed thrust, though.
Croda impressed last time out in July when it announced record profits during the first half and solid sales growth across all three of its divisions. Revenues momentum picked up in the latter portion of the period, and signs of more progress in the last quarter could send the company’s share price storming past the all-time highs struck in early October.
Croda’s forward P/E ratio of 24.2 times might be high on paper, but in my opinion the Footsie firm’s worth every penny right now.
Royston Wild does not own shares in Croda International.
Andy Ross: Mondi
Mondi (LSE: MNDI), is a great company for investors to hold in turbulent times, I reckon. Mondi provides investors with a fairly juicy 3.7% dividend yield, but unlike some of its higher-yielding FTSE 100 peers, it has much more potential for sustainable dividend growth.
Besides the yield, there is a lot to like about Mondi. The most recent results – released in October – showed that the paper and packaging group had seen third quarter underlying earnings rise 30% to €466m year-on-year.
The company’s growth, the defensive nature of the business sector and the prospect of a sustainable growing dividend should serve investors well right now.
Andy Ross does not own shares in Mondi.
Kevin Godbold: BT
I think BT Group (LSE: BT-A) looks set to perform well in November. The telecoms stock has demonstrated resilience during the current bout of market weakness, and I think we are seeing it benefit from the ‘value trade’. Some market commentators have been arguing that we are seeing a rotation out of expensive growth stocks into cheaper, ‘value’ stocks and BT fits the bill for that.
City analysts forecast the plunge in the firm’s earnings to plateau during 2020, which could presage a recovery. Meanwhile, I expect the firm’s valuation to move closer to the market average, suggesting further upside potential for the shares.
Kevin Godbold does not own shares in BT Group.
Paul Summers: easyJet
Ongoing uncertainty over the manner of the UK’s departure from the EU coupled with high oil prices led investors to jettison airline stocks from their portfolios over the summer. Particularly hard hit was Luton-based budget carrier, easyJet (LSE: EZJ).
I see this as an opportunity. While more turbulence across the industry in the run-up to Brexit can’t be ruled out, a near-40% fall since June suggests a significant amount of ‘bad news’ is already in the price.
Shares in the FTSE 100 flyer trade on a lower earnings multiple than rivals Ryanair and Wizz Air. Income seekers may also wish to note that next year’s forecast 64.4p per share payout equates to a chunky 5.7% yield at the time of writing.
Paul Summers has no position in easyJet.
Peter Stephens: GlaxoSmithKline
Recent stock market volatility could make defensive shares such as GlaxoSmithKline (LSE: GSK) increasingly popular. The company’s financial performance is less correlated to the wider economy than is the case for many of its FTSE 100 peers. This could mean it offers greater resilience and less volatility over the near term.
With a dividend yield of 5.2%, GlaxoSmithKline appears to offer good value for money. Further investment in its pipeline alongside growing demand for its consumer healthcare products could catalyse its growth rate. With a diverse business model, its defensive growth prospects could become increasingly attractive.
Peter Stephens owns shares in GlaxoSmithKline.
Roland Head: BP
If your portfolio is missing any exposure to the oil market, then now could be the ideal time to pick up shares of BP (LSE: BP).
The oil and gas giant’s share price has fallen by about 10% since the start of October. The stock now looks quite attractively priced to me, with a 2018 forecast P/E of 12 and a prospective dividend yield of 5.8%.
Adjusted earnings are expected to rise by 80% to $0.56 per share this year. This should boost cash generation and enable the firm to reduce debt. A dividend increase might also be on the cards. I’d be a buyer at under 550p.
Roland Head does not own shares of BP.
