- Ahead of the Euros, HL experts have been considering what it takes to be a winner.
- 11 top stocks to make up your fantasy portfolio this summer.
- 3 (fund) managers to choose from to supplement your chances of success
The summer of sport kicks off on 14 June with Euro 2024. But it’s not all about the football on the pitch. Companies across many different sectors will be keen to make the most of the fandom that follows. With so many options, which shares would you pick in your fantasy XI for the tournament? And who is the right fund manager to whip them into shape? Here’s who the experts at HL have selected and why:
Top stock picks for the squad
Aarin Chiekrie, equity analyst, Hargreaves Lansdown:
Goalkeeper – ASML has a monopoly on the most advanced type of lithography machines, used to make the chips that power your phones, computers and even cars. Like the best goalkeeper in the world, it’s hard to see any opponent getting past this company in the near future.
Left Back – BAE Systems is a certain name on the plane to Euro 2024. With a mammoth order backlog providing great revenue visibility, this defence company is almost guaranteed to give you a solid performance. And as the integration of its £4.4bn acquisition of Ball Aerospace moves along, there’s plenty of room to grow into the game.
Centre Back – Berkeley Group looks to be sitting on solid ground, despite the current shaky housing market. It offers the option to build from the back thanks to this housebuilder’s formidable order backlog. The three-year £1.5bn pre-tax profit guidance looks well under control, and with the group sporting a very healthy net cash position, there’s room to ride out a few rough challenges along the way.
Centre Back – NatWest has seen red a few times in the past, for example during the Nigel Farage debacle and all the fallout that followed. But with a different CEO now at the helm, many are hopeful it’s grown out of these silly mistakes. With a strong balance sheet and a prospective 5.6% dividend yield on offer, the current valuation looks attractive.
Right Back – AstraZeneca has lofty ambitions to nearly double its annual revenue to $80bn by 2030. That requires a new game plan and as a result the group is seeking to debut 20 new medicines over the same period to help fuel growth. But with plenty of other players in this space, competition to stay ahead of peers is likely to remain fierce.
Central Defensive Midfielder – AB InBev owns fan-favourite beers like Budweiser, Corona, and Stella Artois. Like a midfield maestro, dictating the tempo of the game and spraying passes out to all teammates, the group’s diverse portfolio of drinks brands means it has something for everyone this summer.
Left Midfielder – Entain owns betting houses like Ladbrokes and Coral. It’s been under plenty of pressure from regulators and overall performance has been underwhelming recently. But still, you wouldn’t bet against them turning their form around and making a positive contribution.
Right Midfielder – easyJet looks well-placed to be flying down the wing this summer. The group has a portfolio of slots at some of Europe’s most valuable airports. Trading at a cheap valuation despite increased passenger numbers and revenue per seat in the first half, there’s scope for this airline to become a fan favourite in the near future.
Central Attacking Midfielder – Novo Nordisk is the team’s magician, continually delivering near-unbelievable growth. Sales of the group’s headline weight loss drug, Wegovy, nearly doubled in the US in Q1. Having launched in several European countries last year, there’s plenty to be excited about. But the group’s hefty price tag reflects this, so more standout performances will be needed to justify the investment.
Striker – J D Wetherspoon gets the nod up front. Its low-value proposition means it’s well-placed to block out the noise of an unsettled economy and just focus on its own game. That’s reliable service, no matter where in the country you are. Fans of Wetherspoons continue to turn up and support its pubs, helping like-for-like sales rise 5.2% last quarter.
Striker – Adidas will be looking to get on the front foot this tournament, with many fans set to sport its eye-catching German, Spanish and Italian kits. Host nation Germany’s anti-counterfeit laws could provide an extra incentive to buy from Adidas, especially with fines of up to £4,000 in play for supporters caught wearing fake shirts. After a challenging 2023, which saw revenue and profits wide of the post, Adidas could be poised to score impressive growth this year.
Top managers to whip the squad into shape
Victoria Hasler, head of fund research, Hargreaves Lansdown:
“Based on how you want your team of equities to perform, you might prefer a different type of manager. Each choice below has a different style, so who would you want at the head of your portfolio?
Value – Alex Wright
A good manager cares about the price they pay for their players. After all, you want to be able to afford a whole team, and the less well-known ones often have the potential to grow. Alex Wright, manager of the Fidelity Special Situations fund, has a similar mentality when selecting the team of shares that make up his portfolio. He focuses on unloved companies which he picks up at what he deems to be an attractive price and hopes to coach them back to premier league status.
Diversified – Sebastian Lyon and Charlotte Yonge
Any football team needs a variety of players with different skills and across different positions, be that goalkeeping, defence or attack. The managers of the Troy Trojan fund use a similar strategy of diversification to form a beautiful team of assets that should smooth an investor’s return profile. Sebastian Lyon and Charlotte Yonge combine the equities of large, established companies with bonds (mainly US index-linked bonds), gold and cash to form a well-rounded team that should stand up well to the opponent of market volatility.
Growth – James Thomson
The best football managers seem to have an innate knack for picking the players with the most potential, whether they be current high scorers or less well-known wannabes. A good fund manager does the same with their companies, and James Thomson, who runs the Rathbone Global Opportunities fund, is an example of someone who has consistently shown his ability to see the potential in companies. He looks for easy-to-understand businesses that can grow to dominate their industry and defend well against the competition.”
