Five high-conviction stocks to buy now
Fund manager Tom Walker tips five good-quality stocks set to withstand any wobbles in the global recovery.
Each week, a professional investortells MoneyWeekwhere he'd put hismoney now.This week:Tom Walker,fund manager,Martin CurrieGlobal Portfolio Trust.
In recent years we've seen a large divergence between developed markets, such as America and the UK, and developing markets, such as China. This divergence was particularly pronounced throughout 2013 and at the start of this year.
Asian and emerging markets were hit hard during this period firstly by fears about what might happen when the US Federal Reserve started to buy fewer bonds, known as the taper', and then there was further damage when the taper actually began.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Meanwhile, many developed markets reached record levels, climbing far faster than underlying profits growth. Although the recent rally in emerging markets has gone some way to close the gap, the divergence may continue for some months to come.
As the manager of a global portfolio, I'm often asked how much this type of trend influences my stock choices. The answer is simple. As a bottom-up' stockpicker, I concentrate on the prospects for individual companies.
I focus on identifying well-run companies with sound finances and healthy cash flows, rather than trying to make broad top-down' predictions on the outlook for entire countries or sectors.
In fact, I believe there is ample opportunity for finding high-conviction stocks globally. For instance, in China, after a difficult start to the year, oil producer CNOOC (HK: 883) has continued with its investment spending, and performance has improved in the second quarter. I anticipate the company's production will gather momentum as we approach 2015, with substantial growth expected next year.
Staying in Asia, Taiwan Semiconductor Manufacturing Company's (NYSE: TSM) growth and profit-margin expectations rose in the first quarter of this year. The company is a major beneficiary of increasing demand for low- and mid-end smartphones and tablets.
In developed markets, Apple's (NYSE: AAPL) share price has climbed steadily since the end of April, when there was a positive earnings report. iPhone sales have been stronger than expected, rising 17% to 43.7 million phones in the second quarter, ahead of the new product launches this month.
Meanwhile, LyondellBasell (NYSE: LYB), a US chemical firm that makes ethane-based products, has benefited from lower costs. That's due to the increasing supply of shale gas and associated liquids, including ethane. Lyondell's free cash-flow generation has been impressive and the company is continuing to buy back its shares.
Elsewhere, the Japanese equipment manufacturer Komatsu (NYSE: KMTUF) is a high-quality cyclical business at the trough in the earnings cycle. There is potential for a strong boost to profits as the equipment markets for mining and reconstruction recover in the next few years. I believe Komatsu is even more exposed to this upcoming positive change than its key competitor, Caterpillar.
As a long-term fundamental investor, I believe that in every sector and region there will be opportunities, irrespective of the prevailing conditions. If anything, the current uncertainties over economic recovery actually reemphasise the benefits of stock-focused portfolios based on rigorous research and regional expertise.
That's a better approach than building portfolios whose performance is dictated by big picture' or macro factors.
Sign up for MoneyWeek's newsletters
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
-
The MoneyWeek Readers' Choice Awards 2025
MoneyWeek Awards The MoneyWeek Readers' Choice Awards celebrate the products and services that help you make, keep and spend your money. Find out more about this year's awards.
By MoneyWeek Published
-
8 of the best houses for sale with home cinemas
Houses for sale with home cinemas – from a modern oast-house style property in Kent to a house in Buckinghamshire with Dolby sound and bespoke seating
By Natasha Langan Published