It’s a sunny day, the birds are singing, and the FTSE 100 has finally broken the 7,000 barrier. (Sure, there’s likely to be a Greek exit from the euro in due course, but in the long term even that will be a good thing.) So, is 2015 going to be a good year for UK investments? I’m confident it is, and here are five companies helping to make it so:
London Stock Exchange
If you want a single-stock indicator of the health of the UK stock market, it has to be the London Stock Exchange (LSE: LSE) itself! And if the LSE’s recent record is anything to go by, we could be in for a new golden age.
What we’re looking at is a 41% share price rise over 12 months, to 2,568p, with around 280% over five years. At full-year results time earlier this month, chief executive Xavier Rolet spoke of “organic growth in all business areas and contribution from acquisitions“, and if that’s not a leading indicator of stock market health I don’t know what is.
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AstraZeneca
In AstraZeneca (LSE: AZN) we have a poster child for the importance of strong top-level management, and FTSE 100 bosses don’t come much better than CEO Pascal Soriot. The turnaround that Mr Soriot is in the process of achieving is already well documented, and AstraZeneca’s share price climb of 25% over a year and 85% since that 2012 dip bear testament to the confidence the City has in him. Just wait to see what happens when AstraZeneca’s strong development pipeline leads to likely earnings growth in 2017!
Direct Line
Shares in Direct Line Insurance (LSE: DLG) are up 36% over the past 12 months, and that reflects the strength of the insurance sector recovery. Insurance companies were clearly oversold during the recession as fear preyed upon fear, but they’re getting back to rational long-term valuations. With steady dividend yields of around 5% expected, Direct Line shares still look cheap on a P/E of 13 based on 2016 forecasts.
Man Group
Investment manager Man Group (LSE: EMG) took a hammering when the economic downturn destroyed any chances of the firm making its premium-charge targets, and investors deserted it en masse. Well, actually, they didn’t — it was just a net outflow of cash that did the damage, and that’s really to be expected in tough times.
Over the past 12 months, Man Group shares have more than doubled to 211p, after 2014 results showed an inflow of $3.3bn and a 62% rise in adjusted pre-tax profit.
British Land
Property-based investments were hit hard too, but they’re on the way back with the housebuilding sector flying high. British Land (LSE: BLND) has benefited too, with a 32% gain over 12 months to 877p — and an 82% rise over five years. P/E multiples are a bit high at over 25, but this is a company based on the longer-term value of land. I reckon it deserves a closer look.
