This Month's Top 10 Share Ideas (Jul 11)

Published in Investing on 27 July 2011

We've highlighted opportunities for everyone during July.

Although the market has moved sideways this month, there's been no shortage of investment ideas published by your favourite investment website. So we've decided to round-up a selection for you to consider, just in case you missed the articles first time around. The shares in question range from well-known large-caps down to an obscure Canadian mining outfit.

We hope all the ideas prove rewarding during August... and beyond!

1. Shares you'd never sell

What better investment ideas could you ask for than shares you'd never sell? David Holding asked that very question this month and discovered Fool readers went for blue chips such as British American Tobacco (LSE: BATS) and Diageo (LSE: DGE), alongside Warren Buffett's Berkshire Hathaway (NYSE: BRK-B.US). There were plenty of other suggestions, too.

2. All-star dividend choices

Still on the large-cap theme, Maynard Paton unearthed the most popular shares within the portfolios of nine expert income investors. Topping Maynard's 14-name list were Vodafone (LSE: VOD), GlaxoSmithKline (LSE: GSK) and Royal Dutch Shell (LSE: RDSB). He reckoned anyone buying all fourteen could earn themselves a nice 4.7% income.

3. Blue chips with P/Es of 7 or less

Back to David Holding now and a trawl of the FTSE 100 index for low P/Es. Shares uncovered by his digging included Aviva (LSE: AV), BP (LSE: BP) and AstraZeneca (LSE: AZN). On the latter, David saw the so-called 'patent cliff' more as an opportunity to buy a cheap, low-rated share, than a threat.

4. Going strong since 1909

Malcolm Wheatley liked the cheap cost, diversified nature and global remit of Scottish Mortgage (LSE: SMT), an investment trust established way back in 1909. Malcolm revealed Scottish Mortgage is a top performer among global growth trusts, and had lifted its dividend by more than inflation for 29 years in a row!

5. Sky buy

British Sky Broadcasting (LSE: BSY) caught the attention of Tony Reading after Rupert Murdoch dropped his bid and the shares fell by 20%. Tony believed Sky's market-leading position, dependable subscription revenue and prodigious cash flow still made for an attractive business and the shares were "a good long-term buy".


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6. Lagging the rally

Both Alan Oscroft and Maynard Paton looked favourable at Capita (LSE: CPI) during July. Alan felt the outsourcing specialist was "a well-run, shareholder-focused company, looking to the long term" while Maynard noted the FTSE share now traded at a valuation cheaper than seen at the banking-crash low.

7. Shipping forecast

On to small-caps now and David Holding's third appearance in this top ten. Braemar Shipping Services (LSE: BMS) caught his eye this month after he calculated the shipping broker was essentially valued at 7 times possible earnings and yielded more than 5%. Other attractions included cash in the bank, no debt and a successful track record.

8. Indian blockbuster

The potential of the Bollywood film industry appealed to Tony Reading -- apparently 3.2 billion cinema tickets are sold in India every year and the country's media sector is growing at 10% per annum. Tony pinpointed Eros International (LSE: EROS) and compared its string of box-office hits with a lowly P/E of 10.

9. Bonus tips

Maynard Paton applied an unusual method of locating potential big winners during July. Events at the old Cable & Wireless taught him how executive bonus plans can generate substantial returns, and a tour of the market found promising schemes at Sinclair IS Pharma (LSE: SPH), Liontrust Asset Management (LSE: LIO) and Puricore (LSE: PURI).

10. Punt of the month

Finally, July's 'punt of the month' comes from Tony Luckett -- a big fan of Canada and its wide range of mining shares. Among his holdings is Aberdeen International, a Canadian company that invests in a basket of miners and whose £50m-or-so market cap is 40% below its last reported net asset value. Tony admitted the stock was not for the proverbial widows and orphans!

What next?

We hope you liked this round-up of share ideas from July. As always, don't buy blindly, but instead use the articles as starting points for your own further research. 

We'll be back this time next month for another round-up of our favourite investment ideas!

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Disclosure: The Motley Fool UK owns shares in AstraZeneca and GlaxoSmithKline.

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Kencos 27 Jul 2011 , 1:10pm

Whilst it is not a share deal and no one makes any money from it except the investor, the government incentive for renewable generation of electricity offers 10% or more per annum guaranteed for 25 years. It will vary upwards by the rate electricity prices rise, by the RPI (it's index linked) and it's tax free, regardles of your personal tax situation.

The best fixed ISAs at present are offering 3.75% in return for not withdrawing cash for at least 5 years. Last year's increase in the RPI was 4.8% and whether the "proceeds" from ISAs are tax free or not, that equates to a 1.05% loss in value in one of those years alone. Normal savings accounts are losing approx. 3% per annum at present and whilst you cannot take a solar panel off the roof and cash it at the bank if you run short, providing you intend not to touch the amount used to invest in the solar pv system, it will be returned over approx. 8 years with 100% tax free profit for the remaining guaranteed 17 years left on the scheme. Higher rate tax payers will benefit by up to 18% per annum.

Jimi97 27 Jul 2011 , 5:57pm

The current returns on supplying 'renewable' electricity are, indeed, stunning. I would have considered it seriously if I had a south-facing roof, which I don't. However, there is no guarantee that this 'all-time good deal' will last even the 8 years needed before starting to get a return. Frankly, I am amazed it survived the present Government's Comprehensive Spending Review. Relying on Government policy for the long term (i.e. beyond the next General Election) seems to me to demonstrate an unreasonable degree of optimism.

mcturra2000 27 Jul 2011 , 6:25pm

BATS divvies up 15% today. Kerching.

@Jimi97 Agreed. There was an article on Citywire about this renewable stuff. Some of it was like a 50-year payback. It makes no economic sense. The very fact that the government has to dole out money for these schemes is clear proof of that; in my eyes, anyway.

A lot of this stuff is predicated on governments being especially generous with the FiTs (Feed-in Tarriffs). Government policy is so fickle. One simply can't rely on it.

jaizan 27 Jul 2011 , 9:53pm

Can one rely on generating the amount of electricity claimed by the sales people?
Does the efficiency of the panels remain constant over time, or does output deteriorate as the cells get older?
Do I need to clean the panels on my roof to maintain efficiency?

I have no idea about all this, but would want to see guarantees in the contract before even thinking about it.

goodlifer 28 Jul 2011 , 9:59am
goodlifer 28 Jul 2011 , 10:01am

Too good to be true?
Etc, etc, etc,

Kencos 28 Jul 2011 , 10:03am

Do you receive any guarantees with any other types of investment? If you do, it is certainly not a figure which is the best return possible and not many will even offer any sort of guarantee least of all 10% or more per annum. The FIT is on the statute books it is legislation through parliament and complies with the EU. All political parties have worked on it, it was launched by the labour government and has been endorsed by this government. There are rules in place whereby the current terms will last only until April 2012 when they will reduce the tariff, but not for existing investors. Subsequent years will also see reductions and possibly the terms will change for new joiners of the scheme. The best part of this incentive is once you are on the scheme, the terms will not change, but if you wait too long you will miss the best terms. Share prices change everyday so that should not be difficult for most investors out there to understand.

Also, the scheme is not being paid for by the government, although they guarantee it for 25 years and offer the suppliers a levelisation process, it is the consumer who will pay and is paying right now.

The choice is simple, invest in solar now, using money which will eventually have to be paid out on future electricity bills to suppliers and receive over 10% per annum return, tax free, index linked and a guaranteed net profit of on average of £40,000 over the next 25 years, or do nothing, spend around £40,000 on average on electricity bills and have nothing to show for it.

The manufacturers give a 25 year performance guarantee on the output of the panels and most companies offer their own and an independent insurance warranty to back up their own guarantees should they not be able to honour them in the future.

Suppliers and installers already back up their claims to the returns available by being members of the REA and by being approved by MCS both consumer focussed government regulators. The data used to estimate the return is government issued and is very much underestimated rather than exaggerated. Unless the installer is registered and approved by the above, the installations will not qualify for the incentive.

You can see your investment on the roof and do not have to worry what your bank or other organisation is doing with it and we all know how good some of them are at that! And, how good they are at paying interest which is not even keeping up with inflation.

Do nothing now, and as a colleague of mine says, be ready to go to Bristol if you live in the SE, as that is where the queue will start once the masses realise the implications of the FIT scheme and what it is worth to them!

ANuvver 29 Jul 2011 , 1:00am

I'd just be grateful for the odd sunny day...

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