Stocks
by Martin on January 31, 2018

Best LSE stocks to watch in 2018

The London Stock Exchange (LSE) is the fifth largest stock exchange in the world with a market capitalization above $4 trillion as of October 2017. With over 2,000 companies listed on the exchange, there is no shortage of options to choose from, but not all of them are good options. Usually, it’s best to invest in the stock market for the long-term. This has been Warren Buffet’s strategy and it has obviously worked out well for him. Nevertheless, you can still use a short-term strategy and make a good profit. The key is to find those stocks that have either been going down and are poised for a turnaround, or to find those that are undervalued and rise the wave upwards. In 2018, these might be the best LSE stocks to buy quickly before the year rolls on.

ITV plc

The ITV network is the largest commercial TV network in the UK. Yet, for most of 2017, the share price of the company had been dropping that it became one of the worst performing LSE stocks in the year. From January to December 2017, the company’s share price declined from about £2.10 to £1.68, about a 20% decline, while returns dropped by about 15%. Most of the decline can be attributed to falling advertising revenue by 5%. Nevertheless, the company’s fundamentals still seem solid and destined to recover in 2018. Several investment companies have already raised their ITV outlook to a buy among the best LSE stocks. For example, Deutsche Bank raised their outlook to a $2.53 target while JP Morgan already raised their outlook to $2.6 last year in November. Others including Citigroup, many prominent investors and analysts have already bought the stock – all showing that ITV is bound to make a comeback this year.

Lloyds Banking Group

2017 was great for Lloyds Banking Group as its share price rose by over 10% from about GBX62 to over GBX68. So far this year, there has already been a significant rise to GBX70 and a peak above GBX 72.5 last week. Obviously, the company has an upward momentum, which is why analysts are expecting dividend yields to rise this year. In the 2015 and 2016 financial years, dividend payout was 2.25p and 2.55p respectively. Now, with the rise of the company’s share price, the dividend yield is expected to rise to 4.1p, which is more than many other among the best LSE stocks are offering. Furthermore, the current share price puts the company at a P/E ration of 9.3 that shows it has a huge potential for further growth in 2018.

Imperial brands

If you have no problem investing in sin-stock, then take a gander at Imperial Brands this year among the best LSE stocks. That statement might seem contradictory considering that the company’s stock took a huge 20% decline and still continues to drop in the first month of 2018. However, this may be the best time to get a piece of the company that is seeking to expand its operations into other markets. One of the most prominent prospects seems to be in Asia with the help of Japan Tobacco who could partner with or acquire Imperial Brands. Besides, the company may be looking at the Middle East and North African markets, all of which their rival, British American Tobacco, is yet to dominate. Of course, this appears to be a long-term investment and an uncertain one, but the company fundamentals show that it may still have some kick in its gut.

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