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The most popular shares in August

Nicholas Hyett assesses some of the shares most popular with HL clients last month.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

It’s been an unusually busy summer, with profit warnings and M&A announcements popping up all over the place.

It’s not just the stock market which has been uncharacteristically active in August either. Politicians tend to vanish off on holiday or back to their constituencies at this time of year, but the new government has been busy putting its mark on the Brexit process, with less than happy consequences for sterling.

All that activity has created plenty of buying and selling opportunities, and HL clients haven’t missed the boat.

August’s most popular shares

The lists below show the FTSE 100 and FTSE 250 shares (excluding investment trusts) with the highest number of net buys (buys minus sells) among HL clients in August. We’ve also included some of the most popular large* overseas shares (excluding investment trusts and ETFs).

More about international share dealing

Shares listed alphabetically.

*Of equal or greater size than the market capital of the smallest FTSE 350 stock.

These are provided for your interest, but aren’t a guide as to how you should invest. You should consider your own aims and attitude to risk before making any investment decisions, and remember that investments will fall as well as rise in value so you could back less than you invest. Past performance is not a guide to the future. If you’re not sure whether an investment is right for you, please seek advice.

BP

The oil and gas giant proved popular with clients in August, probably thanks to the release of second quarter results at the end of July.

Despite the 4.5% drop in operating profits to $5.2bn – which was partly down to disappointing oil prices – half year numbers still came in comfortably ahead of analyst expectations. Good news, but the spotlight is really shining on the outlook for shareholder returns.

At $46.5bn, net debt is higher than management might like after it bought assets from BHP. But a disposal programme – which saw BP agree to dispose its entire Alaskan business for $5.6bn in August – means gearing levels are expected to come down. The company believes it’s on track to achieve a gearing ratio in the middle of the 20-30% range in 2020. And that means there’s more breathing room to return cash to shareholders, analysts are expecting a yield of 6.8% next year. The yield is variable and not guaranteed.

Going forwards, cash in hand isn’t the only way BP is repaying investors. The group’s aiming for $1.8bn of share buybacks in the latter half of the year. However, if cash flow generation and debt reduction plans continue their strong runs, the current plans could be extended. Remember though, this isn’t a given, and largely depends on the oil price behaving itself.

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Tritax Big Box REIT

Tritax buys and rents out gigantic warehouses and distribution centres to retailers, and with 18% of all retail conducted online last year, demand is growing for the group’s (very) big boxes. The average warehouse is about the same size as seven football pitches.

Last month’s half year results showed a 5.7% increase in underlying operating profits to £60.7m and the group’s on track to meet its full year dividend target of 6.85p. Growth’s largely thanks to the purchase of new assets, which supported a 4.7% increase in rental income.

More recently, Tritax has started to buy assets that are under development, as supply of existing extra-large warehouses becomes a bit pinched. The new strategy calls for the acquisition of more physical land, and potentially some smaller assets where they complement the portfolio.

Key to that shift is the purchase of a majority stake in logistics development specialist db symmetry – which brings both development expertise and a sizeable land portfolio. The group hopes this new approach will support higher rental incomes and profits, which in theory helps underpin higher returns to shareholders.

Tritax’s assets continue to be in demand, and it’s still very much a specialist, which means we remain fans of the group.

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Disney

Headlines have been dominated by news Spiderman is leaving Disney’s Marvel universe, following a dispute with character rights owner, Sony. That’s not gone down well with diehard fans, but the Disney story still has potential for investors.

Putting aside theme parks and blockbuster movies, it’s the new streaming service that’s got investors excited. Buzz around this new feature – launching later this year – has seen the price to earnings ratio reach 22.9, well above the ten year average.

There is of course stiff competition in this arena – Netflix, Amazon and Apple are not to be taken lightly – but Disney has a very enviable portfolio of content at its disposal. Either way, a premium valuation means the shares would be sensitive if this latest venture fails to entertain new customers.

It might not sound as exciting, but back in the core business the mega-merger with Fox is only just finding its feet, and planned cost savings haven’t even started yet. This giant deal could result in big windfalls for the group, but with so much invested in its success, it’s also higher risk.

Plenty to keep investors interested.

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Before you can invest in US companies you’ll need to complete a W-8BEN. Find out more about the charges.

Unless otherwise stated estimates, including prospective yields, are a consensus of analyst forecasts provided by Thomson Reuters. These estimates are not a reliable indicator of future performance. Yields are variable and not guaranteed. Past performance is not a guide to the future. Investments rise and fall in value so investors could make a loss.

This article is not advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment. This article has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication. Non-independent research is not subject to FCA rules prohibiting dealing ahead of research, however HL has put controls in place (including dealing restrictions, physical and information barriers) to manage potential conflicts of interest presented by such dealing. Please see our full non-independent research disclosure for more information.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

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