The Motley Fool

2 FTSE shares I’d buy before Brexit

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.

Hand drawing a red line between the UK and the rest of EU, Brexit concept.
Image source: Getty Images

The Brexit debacle rumbles on and continues to dominate the front pages. With the outlook so uncertain, it’s just one extra thing to think about when investing. While we can’t make our investments completely Brexit-proof, we can reduce the risk in a meaningful way, and I think these two shares are a great place to start.

Brand Strength

Diageo (LSE: DGE) is a global leader in the alcoholic drinks market, with an enviable collection of well-known brands, including the likes of Johnnie Walker, Gordon’s Gin, Smirnoff, Baileys, Guinness, and many more. The company sells into more than 180 countries, with a focus on the premium segment of the market.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. And if you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio.

Click here to claim your free copy now!

The UK makes up less than 10% of Diageo’s sales. In fact, the company sells almost twice as much in India, as it does in the UK. Its geographic spread of sales represents about as good of a hedge against Brexit, as I’ve seen.

The strength of Diageo’s individual brands also provides an added layer of protection. Well known brands attract brand loyalty, with consumers less likely to turn away from them in times of economic distress.

With nearly 40% of sales occurring in Africa, Latin America, the Caribbean and Asia Pacific, the company looks well placed to take advantage of future economic and demographic trends. Diageo estimates the total annual retail sales of alcoholic drinks to be over £700bn a year, giving it plenty of scope to improve market share and sales in the future.

Financial performance is positive too, with consistent revenue and profit growth over the last four years, while a net profit margin of 17% is highly commendable.

With a price-to-earnings (P/E) ratio of around 22, these shares are certainly not cheap. But that reflects the fact that this is a top quality and highly-sought-after company, whose financial performance should not be unduly affected by Brexit.

Globally Focused

Robert Walters (LSE: RWA) is another name that isn’t over-exposed to the domestic UK economy. The international recruitment company generates 74% of its net fee income from outside of the UK, with nearly 40% coming from Asia Pacific.

It has a presence in at least 30 different countries – a figure continuing to grow. In the first half of this year, net fee income in Asia Pacific was up 10% from the same period a year earlier, while the German business saw both net fee income and operating profit grow by more than 40%. For the company as whole, net fee income and operating profit both rose by 9%.

It’s not just geographical diversification that makes Robert Walters attractive. The company could actually benefit from Brexit, specifically from the movement of workers out of the UK, in the financial services industry in particular. In fact, it is now the leading recruiter for Brexit-related roles in Frankfurt.

At a P/E of just 11, the shares look pretty good value to me. Especially considering that revenues, profits and net assets have all virtually doubled organically since just 2015.

One Killer Stock For The Cybersecurity Surge

Cybersecurity is surging, with experts predicting that the cybersecurity market will reach US$366 billion by 2028more than double what it is today!

And with that kind of growth, this North American company stands to be the biggest winner.

Because their patented “self-repairing” technology is changing the cybersecurity landscape as we know it…

We think it has the potential to become the next famous tech success story.

In fact, we think it could become as big… or even BIGGER than Shopify.

Click here to see how you can uncover the name of this North American stock that’s taking over Silicon Valley, one device at a time…

Thomas has no position in any of the shares mentioned. The Motley Fool UK has recommended Diageo. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.