In the run-up to the UK’s general election on 12 December 2019, well-known investor Lord John Lee was buying shares. And went on record in early January revealing some of the stocks he’d bought.
A lot has happened since, including the arrival of the Covid-19 pandemic. And the immediate prospects for many companies and their businesses changed as the year unfolded. There was also, of course, the stock market crash in the spring when the crisis hit the markets.
But Lord Lee is known for his long-term approach to holding shares. So, how are those stocks faring? And are they worth buying now?
Lord John Lee’s big-cap income investments
Lord Lee usually invests in small-cap shares and sticks with them as they grow. But just before the 2019 election, he invested in FTSE 100 insurance companies Legal & General and Aviva. At the time, they were both yielding more than 7.5%. And he said: “I wanted to park some money in big stocks that are easy to trade.”
At the beginning of December 2019, the Legal & General share price was near 267p. Today, it’s at 256p, as I write, after bouncing back from its stomach-churning dive in the spring market crash. However, earnings dipped a little this year but the company hasn’t missed a beat with its annual dividend increases. Indeed, Legal & General has proved to be a resilient stock-pick by Lord Lee. Would I buy the stock now? Well, with yield still above 7%, I’d be happy to follow him into the share today.
However, the outcome with Aviva, so far, hasn’t been as rosy. At the beginning of December 2019, the share price changed hands near 398p. Today, it’s near 320p. The share price, earnings and the dividend have all been casualties of the pandemic, but they’re all bouncing back now. And today, the forward-looking dividend yield stands near 7.8%.
Would I buy Aviva now? Yes, I would. Financial stocks like these two are vulnerable to the ups and downs of the economy because of their cyclicality. However, I’m optimistic the world is set to recover economically from where we are now.
Post-election top-up investments
Lord Lee said he added to some of his existing and smaller stock holdings “when the Conservative victory was assured.” The stock purchases included agricultural feed producer Anpario, and professional services company Christie. He also bought more shares in palm oil company MP Evans and airline services firm Air Partner. And in a long-standing favourite of his, flavours and fragrances business Treatt.
This table shows how those stocks have performed through the difficulties caused by the Covid-19 pandemic.
Share price on 13/12/19
share price on 26/11/20
Those five have sustained a resilient performance through the crisis. And the two big winners – Anpario and Treatt – will have offset losses in Lord Lee’s portfolio. Would I buy these stocks now? In all five cases, City analysts predict a robust business recovery. And I think all seven of the stocks in this article are serious candidates for my portfolio today.
The post 7 share picks from Lord John Lee and how they’ve fared in 2020 so far appeared first on The Motley Fool UK.
Kevin Godbold has no position in any share mentioned. The Motley Fool UK has recommended Treatt. 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 2020