Ryanair and Greencore among stocks expected to outperform sectors
Ryanair, Greencore, Smurfit Kappa and British Airways owner IAG are among the top share picks over the next six months for Davy Stockbrokers.
The firm said in a report this morning that it believes the shares will outperform their sectors during the remainder of 2013.
It highlighted eight stocks in total, including food group Aryzta, Tullow Oil and United Drug. French firm Saint-Gobain is also picked as a favourite of the broker, whose research team is headed by Barry Dixon.
In relation to Ryanair, which has ordered 175 new aircraft from Boeing and is eyeing significant expansion, Davy said that while the airline’s return to growth strategy has been rewarded by some re-rating in its valuation, the potential for growth is still not fully recognised.
For food group Greencore, Davy also thinks there is a solid foundation for share appreciation.
“Three investment pillars are now in place: improving cash generation, robust delivery in core markets and a sustainable growth opportunity developing in the US,” it said.
With Tullow Oil, headed by Aidan Heavey, Davy says that a recent significant upgrade in discovered reserve volumes in Kenya “is not reflected in the share price”.
“We believe Tullow will outperform on a sector basis and on an absolute basis provided the oil price does not weaken significantly,” according to Davy.