Which of These 5 UK Stocks Wins?
Harvey Jones of The Motley Fool UK sizes up these five London-traded names to see whether any are a solid buy now.
I've been popping stocks into my shopping basket in recent weeks, and it's about time I took one or two to the checkout. Here are five stocks I've found tempting. So should I buy any of them?
Global brewing giant SABMiller (London: SAB) looks and tastes like a premium strength lager, offering a heady blend of fizzy prospects and potent growth from brands such as Peroni, Grolsch, Miller, and Pilsner Urquell.
It has punchy brand marketing and a diverse global reach, with revenues growing strongly in China, Latin America, and Africa, which is on course to be the world's biggest beer market. SABMiller's tremendous economies of scale allow it to standardize its back-office functions and swallow new acquisitions such as Fosters without a burp. If beer isn't to your taste, it has a large soft drinks business as well.
SABMiller is the world's second biggest brewer, after Anheuser Busch InBev, but one thing isn't to my taste. Like a premium lager, it comes at a price. Trading on a P/E of around 20 times earnings, and with a yield below 2%, it looks a little toppy for me.
It isn't often you encounter a stock trading at 24 times earnings, so you would expect a jolly good reason for it. Precious metals miner Fresnillo (London: FRES) has got a fat price on its head, especially when you consider the mining sector trades on an average P/E of around 7.
It is the world's largest silver producer, however, which many investors have been buying instead of pricey gold.