Stock Pick Name - Aggreko

Ticker - AGK

Industry - Industrials: Rental and leasing services

Share Price as of 01/05/2020 - 384.80p

Market Cap - £985.60 Million

IVI Score - 103(88%)

P/E - 7.64

P/S - 0.61

P/C - 1.93

P/B - 0.73

Dividend Yield - 2.14%

Ex-Dividend Date - TBD

Alternatively, you can digest this data via our new RADAR DIAGRAM below

(check out a blog about how this works here)

Stock Pick Name - Mondi PLC

Ticker - MNDI

Industry - Paper & Packaging

Share Price as of 01/05/2020 - 1,410.00p

Market Cap - £6.850 Billion

IVI Score - 232 (88%)

P/E - 8.43

P/S - 0.94

P/C - 4.93

P/B - 1.71

Dividend Yield - 1.7%

Ex-Dividend Date - Not declared

About Our Pick - 

Mondi PLC provides global paper and packaging solutions across numerous industries. We like Mondi because its income is very diversified, both in terms of geography and industry. It supplies various materials to Africa, Europe, North and South America, Asia and Australia, and to industries such as agriculture, automotive, construction, chemical, food, pet care, retail, pharmaceutical etc. 

We have been looking at companies that are unlikely to go bankrupt during the current pandemic and who are taking steps to protect their business. Furthermore, we have been looking at which great companies we can get for a bargain price. Mondi recently updated their shareholders with robust Q1 results despite the current economic climate. They have also taken the decision to suspend their final dividend for the year, usually unforgivable in the Start Investing household, however MNDI has an excellent history of dividend payments and once the chips have settled we are confident this payment will return. The graph below demonstrates how MNDI has prioritised growing its dividend over the last 10 years, we see no reason why the next 10 years will not be the same. 

Stock Pick Name - Redrow PLC

Ticker - RDW

Industry - Home Construction

Share Price as of 01/04/2020 - 359.50p

Market Cap - £1.270 Billion

IVI Score - 104 (95%)

P/E -3.85

P/S - 0.6

P/C - 4.34

P/B - 0.8

Dividend Yield -5.1%

Ex-Dividend Date -Expected September 2020 (not declared)

About Our Pick - 

We have seen housing stocks in the UK become undervalued in 2018 and early 2019 and we believe they have become undervalued again. Redrow in particular has an excellent set of financials, strong balance sheet and good dividend yield. Though the housing market faces a very difficult few months, we believe the drop in RDW's value of over 50% is a short term fall and that the company will recover over the long term. 

Stock Pick Name - Carnival PLC

Ticker - CCL

Industry - Services: Recreational Activities

Share Price as of 01/02/2020 - 2435.00p

Market Cap - £16.650 Billion

IVI Score - 120 (94%)

P/E -5.57

P/S -0.8

P/C - 3.00

P/B - 0.66

Dividend Yield -6.45%

Ex-Dividend Date - 21st May 2020

About Our Pick - 

You may be slightly surprised to see Carnival plc as our March stock pick, because it was our pick last month and has decreased in value by about 20% since then. Is this arrogance? Is it a desperate attempt to claw back some profit? Is it just insanity?! 

The real truth is that nothing has changed with the business in the last month. Carnival has a wide moat in the travel market; cruises are unlikely to disappear and they are still making a large profit. CCL has unsurprisingly been hit very hard by the global sell-off, it is literally on the front pages, the very embodiment of quarantine and sickness. 

We see this as a buying opportunity. 

CCL is still the largest leisure travel company in the world, and one of the highest dividend paying stocks in the FTSE100, paid quarterly. CCL has also increased its dividend payments for the last 5 years and uses less than 50% of its cash flow in doing so. 

Carnival posted record passenger numbers and revenue in 2019, although the net income was marginally lower than in 2018. We expect their short-term earnings to drop as recommendations against travel come in to place, however we hold our investments for the very long term and we see no reason why this company won't be a market leader for many years to come. 

CCL is at the forefront in a growing industry, and with the cash-rich baby boomer generation slowly ageing into the cruise demographic, we believe that Carnival has the platform to perform very well in the next decade. Combined with its impressive market share and excellent history of growth, Carnival’s current financials are very strong, and we see it as a company worth investing in. 

Stock Pick Name - Carnival PLC

Ticker - CCL

Industry - Services: Recreational Activities

Share Price as of 01/02/2020 - 3118.0p

Market Cap - £21.32 Billion

IVI Score - 146 (93%)

P/E - 7.14

P/S - 1.02

P/C - 3.84

P/B - 0.84

Dividend Yield - 4.25%

Ex-Dividend Date - 20th February 2020

About Our Pick - 

Carnival plc is the largest leisure travel company in the world, operating in North America, Europe, Australia and Asia.  It is one of the highest dividend paying stocks in the FTSE100, and they pay it quarterly. CCL has also increased its dividend payments for the last 5 years and uses less than 50% of its cash flow in doing so. 

Carnival has had quite a turbulent 12 months since we last bought it in 2019; last year it suffered an unusually high number of weather related issues and saw a decrease in demand in Europe, however it still managed to post record passenger numbers and revenue in 2019, although the net income was marginally lower than in 2018. 

Coronavirus worries have lead to several cancelled cruises into China and this will almost certainly impact earnings.  The share price has dropped from £37 in the middle of January to around £30.  A news story of an Italian cruise ship with an infected passenger aboard (later proved to be false) also contributed to the share price diving. We believe these to be the kind of short-term troubles that value investors can use to their advantage. 

CCL is the market leader in a growing industry, and with the cash-rich baby boomer generation slowly ageing into the cruise demographic, we believe that Carnival has the platform to perform very well in the next decade. Combined with its impressive market share and excellent history of growth, Carnival’s current financials are very strong, and we see it as a company worth investing in. Although their customers might be off on their holidays, CCL isn't going anywhere. 

IVI - Inherent Value Index, MoS - Margin of Safety

Stock Pick Name - Diversified Gas and Oil PLC

Ticker - DGOC

Industry - Energy: Oil & Gas Integrated

Share Price as of 01/01/20 - 106.50p

Market Cap - £699 Million

IVI Score - 192 (86%)

P/E - 3.11

P/S - 1.97

P/C - 24.33

P/B - 0.98

Dividend Yield - 10.1%

Ex-Dividend Date -5th March 2020

About Our Pick - 

Diversified Gas & Oil PLC is an independent producer of natural gas and oil, primarily in the Appalachian Basin of the United States. It has a 7.8 million acre leasehold in Tennessee, Kentucky, Virginia, West Virginia, Ohio, Pennsylvania, and Maryland.

Diversified Gas and Oil has a stunning set of fundamentals and a 10% dividend yield. With a P/E ratio hovering around 3 and a P/B ratio of <1, this growing energy company should have a value investor's mouth well and truly watering. The next step is to do some digging into why this company is so desperately undervalued - there must be something wrong here? 

We believe the seeming undervaluation is due to this: DGOC had a phenomenal year in 2018, its gross profit increasing from about £14 million in 2017 to £239 million (!) in 2018, through new acquisitions and rapid expansion. The share price has duly increased by about 100% since 2017 but has since stuttered and currently sits at 106p, barely reflective of the massive earnings generated in 2018. 

The intelligent acquisitions and growth have not stopped though, they have recently taken over EdgeMarc Energy, with a company statement:

"We are acquiring these wells at a fraction of the cost incurred to develop them and yet given their long-life nature, we will reap the margin-enhancing benefit from them for years to come."

The latest interim report was very positive with no reason to suggest DGOC cannot continue on its current trajectory; furthermore, the vast majority of its client portfolio is covered by multi-year contracts. Its dividend policy is to distribute 40% of it's free cash flow to investors in the form of dividends, with the intension of delivering a reliable quarterly dividend. 

Stock Name - Royal Dutch Shell B

Ticker - RDS.B

Industry- Energy: Oil & Gas Integrated

Share Price as of 01/12/19 - 2,189.50

Market Cap - £174.20 Billion

IVI Score -121 (94%)

P/E -11.55

P/S -0.63

P/C -15.85

P/B - 1.22

Dividend Yield - 6.9%

Ex-Dividend Date -February 2020

About Our Pick - 

Royal Dutch Shell PLC is an integrated oil and gas company. The company engages in exploration, production, and refining of oil around the world.

RDSB has been our stock pick in June 2018 and March 2019, and after performing well in the interim (and paying us a over 12% in dividends in the mean time), we believe this cyclical stock has now dipped into being undervalued again. As you can see from the fundamentals above, RDSB is looking incredibly strong and is still paying out a healthy, regular dividend.