I like companies with good showings against value, quality and momentum indicators and one popular stock research website puts such beasts in the category it calls ‘super stocks’.
Here’s a heads-up on three such super stocks I’d be happy to buy right now – two from the FTSE 100 and one from the FTSE 250.
HICL Infrastructure (LSE: HICL) focuses on investing in companies and projects around the theme of infrastructure, as the name suggests. The firm’s market capitalisation close to £2.9bn puts it in the FTSE 250, but the business is growing. Right now, it has around 117 investments in countries such as the United Kingdom, Australia, Canada, France, Ireland and the Netherlands.
Examples of the kind of investment the firm makes include schools, hospitals, roads, rail and facilities for the fire and police services, which is all good everyday stuff capable of generating steady returns for HICL. With the share price close to 160p, the dividend yield is running just above 5%, the price-to-earnings (P/E) rating is around 12, and the shares trade around tangible book value. I think the firm has the makings of a decent long-term hold for me.
International software company Micro Focus International (LSE: MCRO) describes itself as an “infrastructure software company with global scale” and claims to be the seventh largest software company in the world. The share price tumbled last year following a profit warning after the firm experienced difficulty digesting its big acquisition of Hewlett Packard Enterprises’ software business. However, operations appear to have steadied from their wobbles and the share price is bouncing back.
At the recent 1,875p, the share price throws up a forward-looking P/E rating of just under 10 for the current trading year and the anticipated dividend yield is a little under 5%. Despite the come-back, I think the company still displays good value and holding the shares could work out well for me over the long haul.
Private equity and infrastructure investment
3i Group (LSE: III) buys, improves and then sells smaller companies and also makes infrastructure investments, mainly focused on the geographies of northern Europe and North America. Last Thursday’s full-year results report from the FTSE 100 firm revealed another period of decent returns
The outlook is positive, with the company saying in the report it’s positioned with significant “growth potential combined with good defensive characteristics.” The directors are “confident” that the firm’s strategy of using a “disciplined but opportunistic” approach to business will deliver “superior” ongoing returns for shareholders.
I like the tone of the language in the report, especially the use of the word ‘confident’ rather than the wishy-washy ‘convinced’ we often see in director-speak. I think the outlook statement works well with a low valuation to make a convincing case for me to invest here. At the recent share price close to 1,087p, the P/E rating runs at just over eight and the dividend yield is close to 3%.
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Kevin Godbold has no position in any share mentioned. The Motley Fool UK has recommended Micro Focus. 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.
Motley Fool UK 2019