I’m bullish on good-quality shares and investments for 2020 and beyond. Here are three that I’d be happy to snap up immediately
Branded luxury goods
Despite all the recent carnage on the high street, Burberry (LSE: BRBY) has been trading well and quietly growing its revenues and earnings a bit each year.
In November with the half-year results, the branded luxury goods manufacturer, wholesaler and retailer reported a solid performance for the six months to 28 September. Chief Executive Marco Gobbetti said in the report that the firm is “on track” to deliver the first phase of its strategy. New products account for about 70% of the company’s main-line retail store offering now, he said, and they’ve been received well by customers.
In early 2018, Burberry recruited Riccardo Tisci as its chief creative officer and his designs have driven “double-digit” growth. There is momentum across “social media, press and influencers,” which is pushing the brand. Meanwhile, distribution is being transformed with rationalisation of the wholesale operation and the refreshing of the firm’s retail stores in all major cities.
Burberry appears to be thriving with rebooted energy and the outlook is positive. Although the forward-looking earnings multiple is in the 20s, I think this is a quality operation that’s transforming into something even more dynamic and could be worth its rating. I’d buy some of the shares with a five-year-plus holding period in mind.
Analytics and decision tools
Information-based analytics and decision tools provider RELX (LSE: REL) has an impressive record of annually rising revenue, earnings, cash flow and dividends. And in a trading update released in October, the company reported 4% growth in underlying revenue in the first nine months of 2019.
The firm acquired 12 assets, spending £378m in the period, and disposed of seven others for proceeds of £62m. I think such nipping and tucking is part of how the directors optimise the business and achieve such steady trading and financial results.
There’s been a share buy-back programme in full swing, and in October, £550m had been spent on that out of a planned £600m. The balance should be completed by the end of this year.
Meanwhile, the outlook is positive with the directors expecting more growth in revenues and earnings ahead. I reckon Relx has been such a consistent performer for so long that it’s worth the forward-looking earnings multiple, which is running at just over 19 for 2020 as I write. This is another stock I’d be happy to tuck away for the long term.
The leading London index
I believe we could be heading into a golden era for investing. So I’d be keen to own a slice of London’s lead index of large-cap companies, the FTSE 100. There’s a generous dividend on offer near 4% and the chart shows the index moving up from a long period of consolidation.
And I’d opt for the accumulation version of a low-cost FTSE 100 index tracker fund so that the dividends will automatically be reinvested for me.
- The State Pension could have you working until 67. Here’s what I’d do to retire early
- The Tullow Oil share price has crashed 55% today. Here's what I'd do now
- Forget the top Cash ISA rate. I'd pocket 7.8% here
- This is how much £1K invested in BT shares 5 years ago would be worth now. Ouch!
- The Lloyds share price is rising - should you buy it and these election winners?
- Top shares for 2020
Kevin Godbold has no position in any share mentioned. The Motley Fool UK has recommended Burberry and Relx. 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