Merryn's Blog

Ten stocks not to buy

Rather than give you an end of year share tip, here is a list of ten global companies you should not touch with a barge pole.

This time last year Mirabaud Securities produced a list of the ten global companies they felt we should all avoid investing in at "virtually all times." Over the year, the average share price of those ten companies fell by 29%.

The firm's official buy list, on the other hand, is stuffed with stocks that are attractively valued, but which also have sound balance sheets and superior long term track records of growth and returns. That portfolio has beaten the market by around 15% in the last year.

Subscribe to MoneyWeek

Become a smarter, better informed investor with MoneyWeek.

This year, they have updated the 'don't touch with a barge pole' list. How does a company get on it? By having a stock price that has lagged the index for ten years; having single digit EPS growth; poor returns on capital; bad dividend histories; and mediocre balance sheets.

Most of this year's turn out to be "capital-intensive outfits operating in over-supplied cyclical industries characterised by mediocre pricing power". Or a bank.

Advertisement
Advertisement - Article continues below

They are:

Air France-KLM (€4.1), Alcatel-Lucent (€1.6), Clariant (CHF9.6), Commerzbank (€1.3), Deutsche Bank (€28), Deutsche Telekom (€9.1), Intesa SanPaolo (€1.2), Lafarge (€27), Outokumpu (€5.2), Stora-Enso (€4.3).

So now you know what not to buy. We'll address the issue of what you should buy once again in the new year.

Happy Christmas.

Advertisement

Most Popular

Visit/520525/currency-corner-how-high-can-the-pound-go-against-the-euro-in-2020
Currencies

Currency Corner: how high can the pound go against the euro in 2020?

In the month in which we should finally leave the European Union, Dominic Frisby takes a look at the pound vs the euro and asks just how high sterling…
13 Jan 2020
Visit/520553/money-minute-wednesday-15-january
Economy

Money Minute Wednesday 15 January: UK inflation and house prices

In today’s Money Minute, we look ahead to the latest UK inflation and house price figures, plus we have Germany’s GDP data for 2019.
15 Jan 2020
Visit/520598/money-minute-thursday-16-january-a-batch-of-company-results
Economy

Money Minute Thursday 16 January: a batch of company results

Today's Money Minute looks ahead to results from a host of UK companies, plus the latest unemployment figures from the US.
15 Jan 2020
Visit/520575/20-predictions-for-the-2020s
Investments

Where will markets be in 2030? Here are 20 forecasts for the 2020s

A lot has changed in the last ten years – stockmarkets soared, technology transformed our lives and politics has changed beyond measure. Here, Dominic…
14 Jan 2020