It’s time for me to highlight three articles from Fool.co.uk that I’ve found particularly insightful over the past week. If you’ve missed them, I think they’re well worth reading, so don’t miss out!
First up this week, our corporate finance veteran Tony Reading passes judgment on five FTSE 100 boardrooms, and assesses their “financial and business acumen”. I think Tony is absolutely right to scrutinise the quality of management when assessing a potential investment, although I’ve always found it hard to quantify myself. Second-ranked Intertek is one of my favourite UK businesses from a qualitative standpoint, and I’d agree with his assessment of the testing specialist’s board. Intertek’s management record of creating value for shareholders is truly noteworthy — Intertek’s earning power has more than tripled in the last decade.
Tony was clearly on fire this week, penning some thoughtful insights into whether Lloyds (LSE: LLOY) (NYSE: LYG.US) or Barclays (LSE: BARC) had the greatest potential of the UK banks. I think it’s worth stressing that the two banks face very different prospects, geographies and lines of business going forward. Barclays will likely continue expanding into international investment banking, as Lloyds embeds itself as a more straightforward UK-focused lender. As ever though, I find it tricky to foresee long-term outcomes for shareholders in either case, and I’ve personally avoided the sector in recent years.
And in this commentary, Foolish writer Peter Stephens explains why BP (LSE: BP) (NYSE: BP.US) should eventually provide decent returns for investors, given its lowly valuation. The market hates uncertainty, and dark clouds have hung over BP for several years now. I’m rarely afraid to get my hands dirty when the market is squirming over a company’s prospects, but is BP a company I’d like to own for the long-term? I can understand why income-minded investors might be attracted by its 4.5% prospective yield, but I’ve never been too excited by the economics of the energy sector — even big players like BP face high capital intensity, no pricing power and highly depreciating, depleting assets.
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> Mark does not own any shares in this article.