Fraserb1990 @Fraserb1990: "Just received an email from..."

@Fraserb1990

United Kingdom

Just received an email from $HL.L (Hargreaves Lansdown) with their 5 stocks to watch in 2024. Their 5 shares to watch included 2 of the stocks in my portfolio, including the latest addition, $LLOY.L (Lloyd's Banking Group PLC) which was nice to see. Their 5 to watch were as follows; 1) $BKR (Baker Hughes Company) - Baker Hughes. 2) $KO (Coca-Cola) - Coca Cola 3) $CVS (CVS Health Corp) - CVS Group 4) $GRG.L (Greggs PLC) - Greggs 5) $LLOY.L - Lloyds Here is my summary of their Coca-Cola piece; Coca-Cola stands out in the beverage industry, not only for its global presence—with products sold in over 200 nations—but also for its robust financial performance, with expectations for revenue and operating profit to grow to approximate figures of $45.5 billion and $13.2 billion in 2023. This financial strength is partially attributed to Coca-Cola's distinctive business strategy, which involves selling concentrate syrup to bottlers rather than manufacturing and bottling the drinks themselves. This approach significantly curtails costs and contributes to the company's impressive gross margins, estimated around 60%. The essence of Coca-Cola's prosperity lies not in the secret recipe of its drinks but in its strategic partnership model. By owning stakes of roughly 20-25% in its key bottlers, many of which are family-held, Coca-Cola ensures mutual dedication to prolonged growth and patient investment strategies that align with family businesses’ values. This stable relationship underpins Coca-Cola's remarkable record of increasing dividends for 61 consecutive years, underpinned by substantial free cash flow, hinting at the possibility of enhanced shareholder returns through stock buybacks in the future. While rapid revenue growth isn't anticipated, and acquisitions pose their challenges—including the arduous task of selecting and integrating the right brands—Coca-Cola's shares have become more attractively priced at a multiple of 20.8 times projected earnings for the next year, suggesting an opportune moment for investors to acquire stakes in this esteemed company. Here is my summary of their piece on Lloyds; UK banks are currently navigating a challenging financial landscape. Having enjoyed a spike in interest income amid rising rates, they're now facing a plateau, compounded by concerns over the ongoing cost-of-living crisis which might affect borrowers' ability to repay loans into 2024, leading to investor wariness. Despite this, the market might not be fully recognising certain positive factors. As pandemic-era mortgages renew at lower rates, profit margins may initially suffer, but this is expected to ease as we move towards the latter part of the year. Banks are also benefiting from a structural hedge—a strategy akin to holding a bond portfolio—that cushions against interest rate fluctuations. As banks transition from low-yield contracts to those with higher yields, they should experience a supplementary increase in income following recent rate hikes. Meanwhile, loan defaults have not surged as anticipated, with institutions like Lloyds not reporting significant rises in delinquencies, suggesting some resilience in the economic backdrop. Lloyds, with its high-quality mortgage portfolio, appears particularly robust and resistant compared to its competitors. With a tempting 7.4% forward dividend yield and a solid balance sheet that could allow for additional capital returns via share buybacks, the prospects for UK banks, though uncertain, could represent a potential opportunity for investors. Despite the gloomy sentiment, UK banks are trading at what appears to be discount prices, making them an attractive purchase, especially for those banking on a rebound. Lloyds, in particular, stands out with its perceived operational strength. Nevertheless, investors should be prepared for volatility and no assured returns. Here is the link to the article for anyone who wants a read: bit.ly/HLD5shares $LLOY.L $KO $CVS $BKR $GRG.L

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