Best shares for November 2019 – part 2

We asked our freelance writers to share their top stock picks for the month.

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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.

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(Part one can be found on Fool.co.uk)

Royston Wild: Taylor Wimpey

As an owner of Taylor Wimpey (LSE: TW) stock, I’m quietly confident ahead of fresh financials slated for release on Wednesday, November 13.

The FTSE 100 homebuilder’s share price has recovered from a sluggish start to October to punch some serious month-on-month gains, strength that’s been built on hopes that a no-deal Brexit has been avoided. But despite this, I believe Taylor Wimpey still looks undervalued, the stock dealing on a sub-10 forward P/E ratio and carrying a monster 10.7% corresponding dividend yield.

This low valuation gives plenty of scope for the share price to surge should those upcoming numbers indeed end up impressing. The latest update from industry rival Barratt Developments certainly bolstered my confidence when it declared that it had continued to enjoy “a good sales rate and a healthy forward order book” in mid-October.

Royston Wild owns shares in Taylor Wimpey and Barratt Developments.


Stepan Lavrouk: Lloyds Banking Group

Shares of Lloyds (LSE: LLOY) are currently trading around 59p a share, and have returned more than 11% over the course of the previous month to shareholders. I believe that the stock can continue being a good store of value for owners, and can continue to deliver going forward. Even with the recent share price appreciation, Lloyds shares currently have a dividend yield of 5.4%, which beats the FTSE 100 average of 4.5%. I also think that bigger banks like Lloyds are comparatively better placed than smaller competitors to deal with the ongoing Brexit uncertainty. 

Stepan Lavrouk does not own shares of Lloyds.


Kirsteen Mackay: BP

BP (LSE:BP) has been experiencing many external pressures in recent years and the share price has suffered.

Although BP just announced its third-quarter earnings fell by 41% year-on-year, it reported underlying replacement cost profits of $2.3bn, which was better than analyst estimates of $1.7bn. It is divesting its poor-performing businesses and attempting to reduce debt and move into cleaner energy production.

Its price-to-earnings ratio (P/E) is reasonably attractive at 11 and earnings per share are 44p, but its most alluring value is its dividend yield of 6.5%. I think investors will continue to be tempted by this and the BP share price will recover.

Kirsteen does not own shares in BP.


Karl Loomes: HSBC

Seeing its share price dip after some weak earnings numbers, I think this offers a perfect dip-buying opportunity for banking giant HSBC Holdings (LSE: HSBA). Arguably following the Pareto principle of concentrating resources where they do the most good, HSBC has announced its intentions to remove capital from the weaker US and Europe regions, and redistribute them to where the company is most profitable – Asia.

Combining this with cost-cutting efforts, particularly with headcount as well as operational reductions, the move looks likely to help the bottom line going forward. Meanwhile interim CEO Noel Quinn seems to have the confidence of the board and investors alike, and is steering the firm in a good direction for the long haul.

Karl has shares in HSBC.


Paul Summers: Greggs

With a general election to look forward to (cough), there’s no way of knowing where markets might head over the remainder of 2019. That said, you can’t really go wrong buying resilient, quality stocks for the long term. Hence, my pick for November is Greggs (LSE: GRG). 

Recent share price weakness has provided new investors (including myself) with an opportunity to at least begin building a position. A valuation of 21 times earnings remains high but I think can be justified by the company’s stellar returns on capital employed, decent finances and great brand. The near-3% dividend yield is a bonus. And regardless of what happens politically over the next few weeks, it’s hard to see demand for competitively priced hot treats going anywhere but up as temperatures begin to fall.

Paul Summers owns shares in Greggs.


Manika Premsingh: RSA Insurance

Share price of the FTSE 100 non-life insurance provider RSA (LSE: RSA) is certainly not at an inspired place. Its last close at the time of writing was at just about 12-month average levels. This could change, however.

It’s a growing, profit-making entity with a positive outlook. In its latest earnings release, it sounded confident of making “significant performance gains” in 2019 and expects to progress further in 2020. Its international operations are a good hedge against Brexit uncertainties, though it gets hit by exchange rate fluctuations too.

Still, on balance, I see it as one of the safer shares that haven’t run-up like more obvious FTSE 100 defensives, which makes it my top share for November.

Manika Premsingh has no position in RSA.


G A Chester: Centamin

Mid-cap gold miner Centamin (LSE: CEY) is my pick, following its recent Q3 report. It distributed an interim dividend of four cents a share ($46m) in the period, but still finished with $289m cash and no debt on its balance sheet.

Management expects to generate strong free cash flow in Q4, and to deliver another four cents (minimum) as a final dividend, giving a running yield of comfortably above 5%. I like the company’s commitment to providing shareholders with attractive cash returns — something you don’t get from owning gold itself — while maintaining a conservative balance sheet.

G A Chester has no position in Centamin.


Roland Head: Kingfisher

Sometimes it pays to bet against the crowd. I’m starting to feel that B&Q owner Kingfisher (LSE: KGF) could be just such an opportunity for contrarian investors.

I admit that Kingfisher has had a difficult few years. Profits are down and the group’s French stores are struggling. But the DIY group remains profitable and cash generative, with a strong market share.

Kingfisher shares now trade on just 10 times earnings. Dividend hunters should collect a 5% yield this year, covered twice by forecast earnings. New boss Thierry Garnier will be keen to turn things around. I think it could be time to start buying.

Roland Head has no position in any share mentioned.


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 considered so you should consider taking independent financial advice.

The Motley Fool UK has recommended HSBC Holdings and Lloyds Banking Group. 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.

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