Q3 Stock Picks - P2 - UK Index Winners & Losers

Q3 Stock Picks – P2 – UK Index Winners & Losers

UK Index outperformers

Online grocer Ocado surprised the markets with several key commercial partnerships with major supermarket chains. Steelmaker Evraz benefited from exposure to US market, which shielded it from some of President Trump’s EU steel tariffs.

Broadcaster Sky continued to be an attractive target of takeover efforts from several major suitors, including Disney and Comcast. Retailer Next remained resilient in the face on worsening outlook for UK High Street.

Supermarket Sainsbury’s unveiled a takeover bid for rival Asda but fell behind sector leader Tesco on sales and market share. Gulf-based healthcare network NMC Health and luxury goods firm Burberry enjoyed a strong share price momentum.

Among the rest of outperformers, Irish packaging giant Smurfit Kappa declined a takeover bid from International Paper, while London Stock Exchange suffered a first major technical outage in 7 years.

… And underperformers

And what about underperformers? Micro Focus issued a profit warning in March, still struggling after troubled acquisition of enterprise software developer HPE.

South African insurer Old Mutual spun-off its wealth management division (named Quilter) with both firms now too small for UK 100 , while peer Standard Life Aberdeen got approval for sale of its pensions business.

Defensive stalwart British American Tobacco spent £500m on new-generation products, but sales growth slowed in spite of weaker Sterling providing a tailwind.

Telecoms giant Vodafone shares were rocked by departure of long-serving CEO, with questions raised about succession planning. Rival BT received interest from outside investors for its Openreach division. IT business Sage Group disappointed shareholders by missing H1 revenue expectations.

Precious metals miners Fresnillo and Randgold Resources are hampered by falling gold prices and worries over new Chinese trade barriers, while housebuilder Barratt Developments felt the weakness of softer UK housing market, damaged by Brexit uncertainty.

Over the next several pages, read in more detail about 10 potential investment opportunities that can develop in Q3 2018.

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This research is produced by Accendo Markets Limited. Research produced and disseminated by Accendo Markets is classified as non-independent research, and is therefore a marketing communication. This investment research has not been prepared in accordance with legal requirements designed to promote its independence and it is not subject to the prohibition on dealing ahead of the dissemination of investment research. This research does not constitute a personal recommendation or offer to enter into a transaction or an investment, and is produced and distributed for information purposes only.

Accendo Markets considers opinions and information contained within the research to be valid when published, and gives no warranty as to the investments referred to in this material. The income from the investments referred to may go down as well as up, and investors may realise losses on investments. The past performance of a particular investment is not necessarily a guide to its future performance.

Prepared by Michael van Dulken, Head of Research

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