A round-up of the best buying opportunities from October.
At last, a positive month for shares!
Following consistent falls throughout May, June, July, August and September, the FTSE 100 has managed to gain some 10% during October. Optimism about a resolution to the eurodebt crisis -- as well as general bottom-fishing -- helped the blue-chip index recover some of the lost ground. The FTSE 100 now only needs to add a further 3% if it is to record a gain this year.
As always, the ups and downs provided numerous share ideas from your favourite investment website and, just in case you missed them the first time around, we've decided to round-up a selection to help you take advantage of any further rebound.
This time, however, we've skipped the well-known FTSE large-caps and decided to showcase some overseas opportunities alongside a few smaller-company selections. We hope all the ideas prove rewarding during November -- and beyond!
So let's start off with Volkswagen which, as Harvey Jones reminded us, manufacturers Lamborghinis, Bentleys, Audis, Skodas and Seats alongside the venerable VW. Despite sales, profits and market share advancing strongly this year, the German blue-chip has seen its shares fall by a quarter to trade on P/E of 7. Harvey confirmed VW earned 50% of its sales from emerging markets, and owned 50% of Porsche.
Now to Dutch brewer Heineken and what G A Chester described as a "rare opportunity... to buy into a genuine global consumer brand at a knock-down price." A portfolio of famous bevies, including Newcastle Brown Ale and Strongbow, as well as a long-standing family shareholding and modest valuation, were among the attractions. G A noted Heineken traded at 12 times forecast profits, compared to 14 for Diageo (LSE: DGE) and 15 for SABMiller (LSE: SAB).
Moving to Switzerland, and Prabhat Sakya pinpointed Syngenta (NYSE: SVT.US) as a good play on the world's growing appetite for food. Prabhat told us Syngenta was a world-leading developer of herbicides, insecticides and fungicides for protecting crops, and was spending $1 billion a year researching technologies such as metabolomics and gene stacking. A P/E of 14 and plans to increase sales from $8 billion to $12 billion between 2010 and 2015 supported his bull case.
Not a company this time, but a whole country. Tony Reading highlighted Brazil as cheap following a 25% market drop that left the Bovespa index valued at 8 times earnings and offering a 4.5% income. A fast-growing economy, an expanding middle class and a wealth of natural resources were among the features that appealed to Tony, and he suggested Shares MSCI Brazil (LSE: IBZL) and JP Morgan Brazil Investment Trust (LSE: JPB) as simple ways of backing the 'B' in BRIC.
This month Tony Luckett kindly revealed the one share he bought during September. Materials specialist Cookson (LSE: CKSN) was his pick, following some cracking half-year results that showed sales up 12% and earnings up 35%. Even though the mid-cap had upgraded its expectations for the full year, Tony noted the share's forecast P/E was just 6 and the potential yield was 5%.
"I think the share looks like a bargain" was how Alan Oscroft described XP (LSE: XPP), a specialist manufacturer of power supplies and associated devices. Six-month figures from this small-cap revealed sales up 28%, earnings up 70% and a dividend up 46%, yet the shares -- which have lost 50% since their peak -- trade on a P/E of just 8 and yield 4.5%.
7. Quintain Estates and Development
A site tour complete with hard hat and heavy boots convinced Simon Murphy about the merits of Quintain Estates and Development (LSE: QED). The small-cap property concern is currently developing prominent sites at Wembley and Greenwich, yet trades at a whopping 66% discount to its balance-sheet value. Simon believed the growing presence of active investor Laxey Partners on the shareholder register could produce returns sooner rather than later
8. Abbey Protection
G A Chester pinpointed Abbey Protection (LSE: ABB) as a possible beneficiary of government initiatives to ramp up tax collections. The appointment of 2,000 extra tax inspectors to investigate the tax affairs of country's richest residents should be good news for Abbey, as the AIM-quoted firm sells insurance that covers the cost of professional fees arising from such enquiries. Abbey's P/E of 10 and cash-flush balance sheet were also highlighted.
9. Vertu Motors
A steep discount to net assets was the "value appeal" cited by Stephen Bland when he revisited Vertu Motors (LSE: VTU) this month. A £48 million market cap now compares to an £80 million tangible book value, which in turn is blessed with a large property element and a net cash position. After the AIM-traded car dealer acknowledged current-year profits coming in at the lower end of expectations, the P/E has since dropped to a lowly 8.
10. Punt of the month
Yet another AIM share, this time unearthed by David Holding. Hydrodec (LSE: HYD) has developed a process for recycling used industrial oil and has already established plants in the States and Australia. The firm is also not far from starting production in Japan, where tough environmental rules apparently mean there's a $1 billion market to go for. Recent statements have revealed further losses, but recent sales did improve 26%.
We hope you liked this round-up of share ideas from October. As always, don't buy blindly, but instead use the articles as starting points for your own further research. If you can't decide what to buy, or don't like this particular selection, then you may wish to read G A Chester's advice on building a FTSE 100 starter portfolio!
We'll be back this time next month for another round-up of our favourite investment ideas. Happy investing, and good luck!
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> The Motley Fool owns shares in Abbey Protection.