The bullish case for the FTSE 100 has been plain for some time. From the start of the year the broad bullish case is as follows:
- Fast UK vaccine roll-out
- Pent up savings in the UK of £150 billion apx.
- Post Brexit enthusiasm returning for investors into the UK
However, within the FTSE 100, Bloomberg has published a narrower group of 18 companies which have the potential to outperform. Of course, this outlook depends on the broad strength remaining for the FTSE 100, but the reasons for the stock selection include the following:
- Provision writebacks for banks
- Payment acceleration
- Lending growth
- Dividend increases
- Pent up savings being spent
- Strategic changes within the company
The shares listed are as follows: ABF, AstraZeneca, Aviva, Barlcays, BAT, Berkeley, BP, BT, Burberry, Coca-Cola, Glencore, Compass, Llloyds, Sainsbury, Std Life Aberdeen, Vodafone, Whitbread. So, if you are looking for a way to try and boost an FTSE 100 play this may be one way worth considering, Since the groups collective bottom around August last year the forward consensus EPS is up 57% as of the end of May (25th). The other alternative is to keep looking at sensible technical places to enter the FTSE 100 for longs. The main risk to this outlook is if we see a correction on global stocks. Q3 earnings are going to create some pretty tough comparisons going forward so that or a shift from the Fed would be the most likely culprit to drag global indices down. However, the FTSE 100 is an even better buy on the dip in my book and these 18 shares might be too, so worth keeping a lookout for them.
