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3 Hot Picks For March? Aviva plc, London Stock Exchange Group Plc And Gulf Marine Services PLC

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!

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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.