TOTAL Produce and Tullow Oil should be at the top of investors' wish lists, according to Merrion Stockbrokers' top stock picks for the final months of 2013.
Its top "buy" recommendations, released yesterday, included Simon Property Group, Novo Nordisk, Total Produce, Glanbia, DCC, Tullow, Dragon Oil and FBD Insurance. On the sell side, the stockbroking firm recommended that investors short construction companies CRH and Grafton.
DCC, which is entering an important season given that the second half of the year generally makes up 65 to 70pc of its total profit, enjoyed a sterling review. "DCC has been among the most consistent firms in their sector in terms of the group's ability to generate both strong top line revenue growth and bottom line profitability irrespective of the underlying macroeconomic environment," said Merrion. "We expect that this historical performance will continue."
Merrion was similarly positive about US real estate trust Simon Property Group, which was highlighted as "very conservatively run from a balance sheet perspective". Merrion noted that as Simon is a real estate trust, a significant portion of what it earns is paid out to shareholders.
Glanbia's ongoing restructuring, which places increasing emphasis on its whey protein business, was flagged as good news. "The near to medium term outlook for Glanbia remains strong," said Merrion. It called this year's 20pc jump in Glanbia's branded sales "impressive" and noted that the construction of a €150m dairy processing plant in Kilkenny is progressing well.
Oil and gas mining company Tullow also got a "buy" recommendation, despite a string of disappointing and inconclusive exploration results this year. These, it argued, negatively affected Tullow's share price performance to the extent that the company now offers a low cost of entry for investors.
"Despite some recent high profile exploration disappointments, Tullow's exploration portfolio remains significant," it said.
Its sell recommendation for construction company CRH was very negative, though the stockbroker noted that the company has probably reached the lowest point in its current cycle.
And despite a recovery in Grafton's UK and Ireland sales this year, "against a tepid market backdrop that is expected . . . the share price would appear to be factoring in too much too soon".