FTSE 100 Stock Picks
The Royals have nothing on our EasyGBP share picks this week, well, maybe they do, but even princes and princesses need to be watchlist ready; check it out!
This week’s snapshot is focused on 2 shares across our EasyGBP wallet:
Unilever PLC (ULVR)
The multinational diversified personal product company, Unilever, needs no introduction and, despite recent challenges, should be suitable for investors over the long term.
The consumer goods maker is behind some of the most recognized premium brands globally, and some of its household brands include Knorr, Lipton, Axe, Dove, Omo, Sunlight, and more. The fast-moving consumer goods company’s exciting fourth-quarter underlying sales growth of 4.9% back in February was topped by its Q1 2022 update, which showed a 7.3% Underlying sales growth.
- Share Price: £23
- Market Cap: £5 billion.
- P/E Ratio (TTM): 19.8x
- P/B Ratio: 6.8x
- Dividend (Annual Yield %): 3.78%
- 52 Week range low of £67 and £ 43.88 share high.
Outlook – Inflation should pressure consumer goods companies, but considering its premium brands' pricing power, Unilever should offset any inflation headwinds. The FTSE 100 share is resilient, and its defensive qualities and diversified revenue streams make it attractive. Not to mention it also has a generous dividend yield of 3.78%. Our estimates show that Unilever's share price is undervalued and holds considerable value compared to its peer group.
Technical Outlook: The share price has been under pressure this year but has rebounded from recent 5year lows and is ticking higher. Price is heading towards a major resistance area at £ 39.64 and a psychological £40.00 a share level which will be watched closely for a retracement. Unilever has a Beta of 0.56 compared to its broader market and has relatively low short interest at 0.28% of shares outstanding.
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Scottish Mortgage Investment Trust PLC (SMT)
Do not be fooled; this investment trust company has nothing to do with mortgages, has been around since 1909, and is globally focused.
Scottish Mortgage Investment Trust is a closed-ended equity mutual fund launched and managed by Baillie Gifford & Co Ltd. The fund has become one of the UK's popular global tech funds, which invests in high-growth companies and disruptive technologies. Some of the most popular holdings include Moderna, Tesla, Nvidia, Tencent, ASML, and many more.
- Share Price: £99
- Market Cap: £50 billion.
- P/E Ratio (TTM): N/A
- P/B Ratio: 0.8x
- Dividend (Annual Yield %): 0.45%
- 52 Week range low of £71 and £ 15.69 share high.
Outlook – With the fund being so heavily invested in the growth sector, it is no wonder that the share price is down over 40% YTD. The bear market might be far from over, but looking ahead, this could be an opportune moment for tech investors to grab some shares at discount prices. Scottish Mortgage Investment Trust PLC shares are currently trading below fair value by our estimates and could hold significant long-term value once the growth sector rebounds.
Technical Outlook: The price action is rebounding from a significant support level of around £ 6.65 a share which needs to hold to negate any further downside. The price action is currently supported by the 50-day simple moving average (SMA) of price (blue line) but needs to break through the overhead resistance around the £ 8.24 share level.
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Read: Rolls-Royce is cruising in profits amid uncertainties
Sources –EasyResearch, Reuters, London Stock Exchange (LSE), Barron’s, Unilever PLC, James Fox, Scottish Mortgage Investment Trust PLC, Cliff D'Arcy. Koyfin.
Follow Barry Dumas
@BEEF_FINMARKETS
Barry is a market analyst with GT247, with a wealth of experience in the investment markets. Now in his tenth year in the markets, Barry "The Beef" Dumas brings a combination of technical analysis and fundamental insights to the table.
