Mindful Money’s Monday share tips: SABMiller, Unilever & BHP Billiton

20th January 2014

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Investors will be watching out for signs of further growth from SABMiller’s emerging market operations when its delivers its trading update on Tuesday.

The impact of China’s slowing economic growth will be of particular interest to shareholders as the region now accounts for some 24% of the company’s sales.

The FTSE 100 listed South African brewer, which owns brands such as Peroni and Castle lager, has witnessed its shares edge up by 3% over the past year but fall by 4% over the last three months.

However brokers at JP Morgan Cazenove have just re-iterated an ‘overweight’ recommendation on the stock while Nomura has labeled it a ‘reduce’. Sheridan Admans, investment research manager at The Share Centre is calling it a ‘hold’ ahead of the third quarter trading statement.

He says: “Investors will also be keen to see if its strategy to selectively reduce prices in its European operation is continuing to support volume growth.”

Anglo-Dutch consumer goods group Unilever, which owns a plethora of household staples including Dove soap, Liptons Tea and Persil publishes its fourth quarter results on Tuesday.

It is anticipated that growth in its European operations will remain tough as consumer sentiment remains soft and competition in the US is likely to remain robust.

Shares in the firm have plateaued over the past 12 months and edged down by 1% over three months. Analysts at Panmure Gordon reiterated a ‘hold’ position but JP Morgan Casenove has downgraded it to ‘underweight’.

However Deutsche is still calling it a ‘buy’, as is Admans. He says: “Investors will be expecting to see good performance in its emerging market operations as local products have helped spur growth. However, as it is highly exposed to emerging markets, adverse currency movements could be a drag.”

Wednesday sees miner BHP Billiton deliver its second quarter results. The base metals specialist received a note of approval from Citigroup after it upgraded the stock to a ‘buy’, sending its shares 6% higher over one week, following an 8% fall over the past 12 months.

Admans is also backing the shares. He says: “As economies around the world look to be heading into better shape, investors will be interested in the management’s outlook for commodities and looking for signs of recovery in the commodity market.

“BHP Billiton is a bellwether company for the sector and investors will be keen to hear any plans for further investments, which have been reined in recently.”

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