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We asked our freelance writers to share the top British stocks they’d buy this April. Here’s what they chose:
Rupert Hargreaves: IWG
As parts of the world start to move on from the pandemic, companies are re-evaluating their office footprints. Many firms have already announced they’re introducing more flexible working patterns, and this is proving to be good news for IWG (LSE: IWG).
Owner of the Regus brand and one of the largest flexible office space groups globally, IWG has already registered growing interest from corporations looking to scale-down their footprints. This could help support the company’s growth throughout 2021.
The most considerable risk the business faces is another economic slowdown. That could hit demand and slow the return to growth.
Rupert Hargreaves does not own shares in IWG.
Matthew Dumigan: Scottish Mortgage Investment Trust
After delivering a stellar return over the last five years, Scottish Mortgage Investment Trust (LSE: SMT) has stumbled upon tricky times over recent weeks, watching its price drop sharply since mid-February.
The increased appeal of cyclical recovery plays and concerns in relation to an overpriced US tech sector appear to be behind the recent sell-off.
Nevertheless, since I’m confident in the trust’s long-term approach and ability to identify the companies of the future, I would be inclined to see the recent dip as an opportunity to buy shares in this top British stock at a discount price in April.
Matthew Dumigan has no position in Scottish Mortgage Investment Trust.
Nadia Yaqub: Royal Mail
I’ve recently turned bullish on Royal Mail (LSE: RMG). The company continues to see parcel volume growth due to the online shopping boom. As a result, it has upgraded its full-year revenue guidance. Royal Mail expects to release its results in May.
The company is boosting is infrastructure with an automated parcel hub in the Midlands. It has also come to an agreement with union members and both parties are working together. I think Royal Mail is taking the right steps and a reinstatement of its full dividend could be possible. I reckon the shares could grow further.
Nadia Yaqub does not own shares in Royal Mail.
Jonathan Smith: Greggs
Greggs (LSE:GRG) is a UK-based bakery chain with over 2,000 stores in operation. Recently, full-year results showed a loss of £13.7m, a stark fall from the 2019 profit of £108.3m.
I think the issue here is predominately based around the impact of the pandemic and so think that Greggs specifically are doing well. In fact, the company net opened 28 stores during 2020.
The business is also focusing on diversifying revenue channels, with products now available in supermarkets as well as for home delivery. Both areas should boost profitability into 2021 and beyond.
Jonathan Smith has no position in Greggs.
Christopher Ruane: Unilever
Consumer goods giant Unilever (LSE: ULVR) hasn’t had a great 2021 so far. Its shares have given up some of their gains from last year.
But the company owns brands from Dove to Cif, which are used daily in millions of households worldwide. That does mean some currency risks and post-pandemic hygiene product usage may fall. But with its strong brands, global distribution and spread of businesses, I regard the name as attractive for the long-term. It’s well-established with experienced management.
I see the current price weakness as a buying opportunity for this top British stock in April.
Christopher Ruane owns shares in Unilever.
Jabran Khan: Playtech
FTSE 100 gaming giant Playtech (LSE:PTEC) is one of the largest gaming software suppliers. Playtech creates and delivers platforms for approximately 140 betting firms across 19 countries.
Gaming is a multi-billion-dollar industry and continues to grow. Recent full-year results confirmed cash preservation and a strong balance sheet. B2B and B2C markets continue to perform well with new agreements signed in previously untapped territories.
At Playtech’s current price point, I consider it to be a great opportunity. It has recovered some of its loss in price since the market crash but is still nowhere near 2018 highs.
Jabran Khan has no position in any shares mentioned.
Roland Head: Redrow
FTSE 250 housebuilder Redrow (LSE: RDW) says it’s already sold 95% of the houses it expects to build by the end of June. The company’s order book reached a record £1.3bn at the end of December, stretching into the next financial year.
Redrow’s share price has already bounced back strongly from the lows seen in April last year. But with the stock trading at just 1.2 times book value, I think Redrow still looks very affordable.
With more than £200m of net cash on the books, the main risk I can see is that the housing market will slow down later this year. I can’t rule that out. But I think Redrow looks attractive at the moment.
Roland Head has no position in any share mentioned.
Edward Sheldon: London Stock Exchange Group
My top British stock for April is London Stock Exchange Group (LSE: LSEG). It’s a leading financial infrastructure and data company.
London Stock Exchange’s share price has taken a hit recently after the group advised that it will face higher-than-expected costs this year. I see this share price weakness as a buying opportunity. Full-year 2020 results, posted in March, were relatively solid with earnings up 5%. Encouragingly, the dividend was hiked 7% which suggests that management is confident about the future.
Even after the share price fall, the stock isn’t cheap. This is a risk to consider. However, it’s worth noting that since the pullback, several directors have snapped up stock. I see this insider buying as a bullish signal.
Edward Sheldon owns shares in London Stock Exchange Group.
Zaven Boyrazian: ITV
ITV (LSE:ITV) is the UK’s second-largest broadcasting company that generates revenue by selling advertising time to its customers.
Live TV viewership has been declining in recent years, as streaming services like Netflix gain more popularity. However, ITV has acknowledged this and launched its own free streaming service called ITV Hub.
Today more than 33m people have signed up. And viewing hours continue to grow. Predicting viewing habits to produce new popular content is quite a challenge.
But given its successful track record, ITV looks like it can thrive in the new streaming environment, and so it’s a stock I’d like to have in my portfolio.
Zaven Boyrazian does not own shares in ITV or Netflix.
Royston Wild: Naked Wines
The Naked Wines (LSE: WINE) share price has fallen sharply from the record peaks above 800p struck in February. I think this provides a terrific dip buying opportunity. And particularly with full-year trading results scheduled for Thursday, 15 April.
I reckon those upcoming financials will remind the market of Naked Wines’s exceptional growth potential. Most recent financials showed sales soar 80% in the six months to September thanks to strong demand from both new and repeat customers.
It’s critical to remember that recent sales have been driven in large part by Covid-19 lockdowns. Naked Wines therefore faces the possibility that revenues could slow as restrictions ease. Still, I think its robust position in the fast-growing online retail segment will still deliver bubbly sales progress looking ahead.
Royston Wild does not own shares in Naked Wines.
Kirsteen Mackay: Greggs
FTSE 250 high street hot food shop, Greggs (LSE:GRG) posted a loss for 2020 after lockdowns decimated its sales. However, with lockdowns gradually being lifted in April, I think this top British stock will begin to pick up pace again in April.
2019 profit was £108m, while its 2020 loss was approaching £14m. The business was hugely popular prior to the pandemic and I think it’s likely to return to high-footfall and demand once the high streets reopen. Taking the bull by the horns, the company plans to open 150 new stores this year. It’s also branching into supermarkets and embracing home delivery options.
Kirsteen Mackay does not own shares in Greggs.
Paul Summers: Stock Spirits
One share that’s caught my eye recently is branded spirits firm Stock Spirits (LSE: STCK). Like industry peer Diageo, I think the mid-cap could do very well once the pandemic has been sent packing.
Naturally, news of another potential coronavirus wave in Europe isn’t ideal considering the firm’s presence in these markets. Even so, a valuation of just over 15 times earnings isn’t demanding for a company in this sector. Moreover, Stock’s off-trade focus should help to mitigate the impact of further closures to bars and restaurants. The robust balance sheet is another attraction.
Paul Summers has no position in Stock Spirits.
G A Chester: Hikma Pharmaceuticals
Hikma Pharmaceuticals (LSE: HIK) shares are at a decent discount to their level earlier this year. I think it’s a good opportunity to buy into this specialist in non-branded generic and in-licensed drugs.
Dollar weakness, a rotation out of defensive stocks into cyclicals, and company guidance for 2021 being below City expectations have all weighed negatively on Hikma. These factors may keep the shares depressed in the short term.
However, chief executive Siggi Olafsson has a track record of guiding conservatively at the start of the year and upgrading as it progresses. As such, I think Hikma’s current 16 times forecast earnings represents good value.
G A Chester has no position in Hikma Pharmaceuticals.
Manika Premsingh: Ferrexpo
The FTSE 250 iron ore miner Ferrexpo (LSE: FXPO), much like other industrial metals’ miners, had an unexpectedly good 2020 as commodity prices boomed. 2021 is shaping up quite well too. Its share price is up 35% since the start of the year.
The economy expected to gather steam through this year. A big fiscal stimulus from the US likely to be directed towards infrastructure creation. And China’s huge commodities’ demand is likely to continue growing, albeit at a slower pace than last year.
These developments bode well for Ferrexpo, which still trades at a surprisingly low earnings ratio of 3.6 times, making it a bargain buy for me at this time.
Manika Premsingh does not own Ferrexpo shares.
The post Top British stocks for April appeared first on The Motley Fool UK.
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The Motley Fool UK has recommended Avon Rubber, Barclays, Diageo, Hargreaves Lansdown, HSBC Holdings, Just Eat Takeaway.com N.V., Keywords Studios, and Morrisons. 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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