The Motley Fool

3 stocks you didn’t know Neil Woodford owns

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.

Neil Woodford is one of the most reputable fund mangers in the UK equity income space. His big bets on tobacco stocks in the nineties and his decision to stay out of the technology sector before the dot-com bubble has earned his investors — and himself — huge returns.

Most of us in the investing world know that he still holds big positions in tobacco and healthcare stocks today, but relatively few of us know that small- and mid-cap stocks make up an increasingly larger share of his portfolio. You may be surprised to find out that relatively obscure names, such as Allied Minds (LSE: ALM), Newriver Reit (LSE: NRR) and BCA Marketplace (LSE: BCA), are some of the Woodford Equity Income Fund’s largest positions.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

Allied Minds

Woodford is a big fan of Allied Minds, a company which commercialises technology research from universities. The technology incubator is currently the 12th largest holding in the Woodford Equity Income Fund, with his investment company directly controlling a 28% stake in the company.

Investing in early stage innovation is a risky business, but it can be very rewarding if and when investments start to pay off. Many of the companies which Allied invests in have minimal cash flow and unproven track records.

That said, the company’s diversified portfolio of investments and the due diligence conducted by management helps to de-risk promising, early-stage innovations. Moreover, Allied Minds’ good relationships with the best research institutions in the US gives it a unique strategic position within its industry.

Newriver Reit

NewRiver is a small-cap UK property company specialising in the retail and warehousing sector. The REIT has an above average dividend yield of 6.4%, which allows it to easily beat the sector average of 3.8%. As such, it has appeal for income-starved investors at a time when interest rates are so low. It also helps to explain why NewRiver trades at a premium of 15% to its net asset value (NAV) of 290p.

Looking forward, City analysts expect the REIT’s prospective dividend yield to rise to 6.6% by the end of 2017 and 6.7% by 2018.

BCA Marketplace

Another interesting Woodford holding is BCA Marketplace. The automotive business is the 19th largest holding in Woodford’s fund, with the stock representing 1.39% of its portfolio as at 31 January 2017.

Through its acquisition-led growth strategy, BCA Marketplace owns and operates We Buy Any Car, the UK’s largest vehicle buying service, and the company is also Europe’s largest used-vehicle marketplace. Formerly known as Haversham Holdings, BCA has strong growth prospects as it expands its footprint and leverage its scale in the automotive marketplace to deliver economies of scale.

Looking forward, City analysts have pencilled in underlying EPS growth of 56% this year, with a further expansion of 20% in 2017/8 and 13% in 2018/9. Such rapid earnings growth would likely be accompanied by similarly robust dividend growth too. City analysts expect dividends to rise 36% this year, which gives its shares a prospective yield of 3.6%.

Trading on a P/E ratio of 20.7 times expected earnings, and with a dividend yield of 2.6%, BCA Marketplace looks reasonably priced given the high growth expectations of the company.

“This Stock Could Be Like Buying Amazon in 1997”

I'm sure you'll agree that's quite the statement from Motley Fool Co-Founder Tom Gardner.

But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.

What's more, we firmly believe there's still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.

And right now, we're giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool.

Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge!

Jack Tang has no position in any shares mentioned. 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.

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.