Investors should pick up 'cheap' U.K. stocks, UBS says

Dow Jones11-19

MW Investors should pick up 'cheap' U.K. stocks, UBS says

By Louis Goss

Investors should start buying "cheap" U.K. stocks to shield their investments against increasing levels of volatility in the global economy, UBS has said.

In a note, UBS analysts, led by Andrew Garthwaite, said they believe U.K. stocks are currently particularly well positioned for gains as the global economy looks set to enter a period of heightened uncertainty.

UBS's analysts upgraded the U.K. to an "overweight" rating as they noted British stocks are currently "abnormally cheap" with almost all sectors trading at double discounts compared to their U.S. counterparts.

The analysts explained that U.K. stocks are well positioned to benefit from an expected increase in the value of the US dollar, with almost 20% of all revenue generated by British companies currently derived from the U.S., the analysts said.

High levels of political stability in Britain - particularly compared to rival locations including France, Germany and Japan - adds to the attractiveness of U.K. equities, UBS's analysts added.

British stocks are also more shielded from the impacts of any decisions Donald Trump might make while in office, compared to places elsewhere, largely due to the fact it has a relatively tiny trade surplus with the U.S. and low exposure to China.

For those looking to invest in U.K. stocks, UBS's analysts said buyers should look at Britain's banks, brick manufacturers, and house builders, who could all be boosted by lower interest rates.

UBS also pointed to a number of "abnormally cheap" U.K. stocks including insurer Admiral (UK:ADM), medical products manufacturer Smith & Nephew (UK:SN), outsourcing company Serco (UK:SRP), chemicals manufacturer Croda (UK:CRDA), recruitment firm Hays (UK:HAS), and tobacco company Imperial Brands (UK:IMB).

-Louis Goss

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(END) Dow Jones Newswires

November 19, 2024 09:28 ET (14:28 GMT)

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Investors should pick up 'cheap' U.K. stocks, UBS says

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