While the FTSE 100 has just about broken even since the turn of the year at the time of writing, and the FTSE 250 is only down by around 2.5%, other UK-listed stocks haven’t fared so well.
However, these Fools remain bullish and are considering either topping up their shareholdings or taking advantage of the recent weakness to start a position in the business!
AstraZeneca
What it does: AstraZeneca is a global pharmaceutical firm operating across areas including oncology, rare diseases, cardiovascular, respiratory and immunology.
By Ben McPoland. As I write, the AstraZeneca (LSE: AZN) share price is down 10.5% in 2023. However, I’m backing it to rebound strongly next year.
Firstly, the company boasts more than 50 approved drugs on the market across its various categories and is expected to report a healthy uptick in profits next year.
But it’s the future that really excites me. The company’s pipeline is oceanic in its deepness, with some 167 research and development projects. And it has many late stage trails ongoing, targeting large, high-growth markets. Some of these may bear fruit next year.
Of course, some of these could also disappoint in the clinic, which is always a risk. However, the size of the pipeline and a reasonable starting valuation makes me think 2024 could be a strong year.
Finally, brokers are also bullish on the stock and there is a consensus price target of £131. That’s around 30% higher than the current share price of £101, as I write. The stock is on my 2024 buy list.
Ben McPoland does not own shares of AstraZeneca.
Diageo
What it does: Diageo owns a large range of popular beers, spirits and liquors which it sells in almost 180 countries.
By Royston Wild. Drinks giant Diageo (LSE:DGE) has collapsed in price during 2023. Concerns over slowing US sales, and how new CEO Debra Crew will address the problem, have rattled investor confidence.
Fears over an expensive (and image-damaging) legal wrangle with rapper Sean Combs over previous collaborations haven’t helped the mood, either. But I believe the company’s 15% share price decline in 2023 is overdone, and expect it to flip back sharply from current levels.
It leaves the company on a price-to-earnings (P/E) ratio of around 19 times, well below historical norms.
I think Diageo is a perfect stock to own in these troubled times. Even if consumer spending remains under pressure, its market-leading labels (like Johnnie Walker whisky and Baileys Irish cream) will remain in high demand.
In fact, the drinks maker should be able to keep raising prices in the new year to offset ongoing cost pressures. This winning blend helped the company grow organic revenues and pre-tax profit rose 6.5% and 8% respectively in the last financial year (to June 2023).
Royston Wild owns shares in Diageo.
Glencore
What it does: Glencore is one of the world’s largest natural resource companies with operations across 35 countries.
By Andrew Mackie. In the two years following the Covid crash, Glencore (LSE: GLEN) was one of the best performing shares in the FTSE 100. However, year to date, its share price has dropped 20%. This has presented me with a rare opportunity to top up shares in this one-of-a-kind mining business.
Its unique competitive advantage lies in its diversified business model. It operates across the entire value chain, sourcing, marketing, distributing and recycling commodities.
One of the primary reasons why I continue to invest in mining is because I foresee a supply-demand mismatch on the horizon. Copper will be the poster boy of this story.
Study after study has shown that existing copper reserves and production will not be enough to meet the world’s needs for this electrification metal. Electrical grids across the globe need to expand exponentially to cope with an explosion in the likes of EVs and heat pumps.
As a result, I view Glencore shares as very much as a long-term play. As a cyclical business, prices for what it produces tend to swing wildly and, with it, its share price. But I can stomach short term volatility for the ultimate prize.
Andrew Mackie owns shares in Glencore.
Hargreaves Lansdown
What it does: Hargreaves Lansdown operates the largest retail investment platform in the UK.
By Edward Sheldon, CFA. Hargreaves Lansdown (LSE: HL.) shares haven’t performed well in 2023. As I write this in early December, they’re down about 15% for the year.
I’m optimistic that they can rebound in 2024, however.
One catalyst for a rebound could be UK interest rate cuts, which I believe are a real possibility next year. These could decrease the appeal of cash savings and increase the appeal of stock market investing.
Another catalyst could be an increased focus on value stocks, which have been out of favour in 2023. Currently, Hargreaves Lansdown has a low valuation. It also sports a huge dividend yield (over 6%).
Of course, there’s no guarantee that the shares will rebound in 2024. If UK investor confidence remains low, the share price could remain depressed.
Eventually though, I think investors will wake up to the long-term growth potential here, and give the stock a higher earnings multiple.
Edward Sheldon owns shares in Hargreaves Lansdown
Watches of Switzerland Group
What it does: Watches of Switzerland Group is a retailer of classic and luxury timepieces.
By Paul Summers. Shares in Watches of Switzerland Group (LSE: WOSG) have followed the same trajectory in 2023 as those of many companies operating in the luxury sector. As the cost of living crisis intensified, revenue ticked lower in the UK and Europe, not helped by the temporary closure of some showrooms for refurbishment.
I regard recent performance as a healthy (albeit unpleasant) correction for a business whose valuation overheated in the aftermath of the pandemic. Growth prospects remain solid, especially if it can capitalise on the demand for pre-owned timepieces.
We may not have long to wait for a recovery if there’s a drop in interest rates next year. Possibly in anticipation of this, the shares have been steadily rising over November and December.
Considering they still change hands for less than 13 times forward earnings as I type, however, there’s potentially (a lot) more to come.
Paul Summers has no position in Watches of Switzerland Group
