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Best shares for November 2019

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(Part two can be found here)

Rupert Hargreaves: Rank

Shares in gaming business Rank (LSE: RNK) have smashed the market over the past three months thanks to booming revenue growth.

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Three months ago, analysts had been expecting the company – which owns gaming brands such as Grosvenor Casinos and Mecca – to report a decline in earnings for 2019. However, following a strong third quarter, where revenues jumped 10%, the City is now expecting EPS growth of 14% for 2020.

Following this growth upgrade, shares in Rank trade at a relatively undemanding forward P/E of 12.4. They also offer a yield of 3.8%.

If Rank continues to outperform expectations, I think there could be further upside ahead for investors over the next few weeks and months.

Rupert Hargreaves does not own shares in Rank.

Peter Stephens: ITV

Despite its uncertain near-term outlook, ITV (LSE: ITV) could offer investment appeal. The media company is focusing on reducing costs, expanding its digital opportunities and diversifying its revenue growth prospects. In addition, its move into streaming services through the BritBox joint venture with the BBC may lead to an improving financial performance.

Since ITV’s share price has declined over recent years, its forward price-to-earnings (P/E) ratio of 10.8 suggests that it offers a wide margin of safety. While not a particularly resilient business, its low valuation and long-term recovery potential could help it to outperform the wider index.

Peter Stephens does not own shares in ITV.

Fiona Leake: Lloyds

Lloyds (LSE: LLOY) has managed to weather the Brexit storm thus far, recently rising 12% in light of potentially positive news of a deal. However, the stock has remained relatively cheap with a P/E ratio of 10. This is likely due to scepticism surrounding the financial industry due to Brexit.

On top of this, Lloyds has an incredibly tempting dividend yield of 5.4%. The healthy payouts are safe, too, with cover expected to increase to 2.2 times next year. Whilst investors might be holding back until the company’s third-quarter earnings are released at the end of the month, I believe the results won’t be disappointing.

Fiona Leake does not own shares in Lloyds.

Edward Sheldon: Reckitt Benckiser

As we approach 2020, I’m seeing some dark clouds on the horizon. Global growth is stalling, and a recession next year is now a “clear and present danger,” according to the UN. For this reason, my top stock for November is consumer goods champion Reckitt Benckiser (LSE: RB), which owns a world-class portfolio of brands including Nurofen, Dettol, and Harpic.  

I see Reckitt as the ideal stock to own in an economic downturn, as its products are pretty much recession-proof. No matter the state of the economy, people still buy things like painkillers and cleaning products. Reckitt’s competitive advantage is that its brands are well known and, most importantly, trusted.

At the time of writing, Reckitt shares are trading on a P/E ratio of 17.2 and offering a prospective yield of 2.9%. I think those metrics are attractive for this recession-proof stock.

Edward Sheldon owns shares in Reckitt Benckiser.

Kevin Godbold: PZ Cussons

The FTSE 250’s PZ Cussons (LSE: PZC) owns fast-moving consumer brands such as Carex, Imperial Leather and Original Source. The stock has slipped back by around 50% since peaking six years ago because of difficult trading, notably in the firm’s African operations.

But with the shares near 200p, the valuation looks attractive to me. The forward-looking earnings multiple for the trading year to May 2021 sits just below 15 and the anticipated dividend yield is a little above 4.2%. In a recent update, the directors said they expect market conditions to improve in the second half of the year. At this level, I’d buy for November and beyond.

Kevin Godbold does not own shares in PZ Cussons.

Ambrose O’Callaghan: Flutter Entertainment

My top stock for November is Flutter Entertainment (LSE: FLTR). Its shares received a bump after the announcement of a huge merger with the Canada-based gambling firm Stars Group.

The merger with Stars Group makes Flutter the largest online gambling company in the world. It also gives it great access to the emerging US sports betting market, which is still in its early stages of development.

Investors are paying a premium as the stock boasted a P/E of 32 as of close on October 28, but the opportunity for growth is too enticing to pass up here. Flutter stands to gain in a big way from its US sports betting footprint as well as the cross-selling it will receive from Stars Group’s online poker base.

Ambrose O’Callaghan has no position in Flutter Entertainment.

Andy Ross: Centamin

With Germany likely going into recession, the UK in the grips of an interminable Brexit drama and the US shaping up for a presidential race next year, there’s plenty of events to cause fear for investors in the short term.

In this situation, I expect the gold miner Centamin (LSE: CEY) to be a winner, especially as its shares were hit hard during October. In the last month, the share price has declined by around 8%, putting the miner on a P/E of around 23, at a time when the gold price is rising, which bodes well. 

Andy Ross does not own shares in Centamin.

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The Motley Fool UK owns shares of Flutter Entertainment and PZ Cussons. The Motley Fool UK has recommended HSBC Holdings, ITV, 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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