Seven picks... but will they turn out lucky?

THE year 2018 was a turbulent one, separating star stockpickers from novices as shares yo-yoed. Here, The Mail on Sunday’s City team take a punt on the shares that they think have the best chance of riding out the storm in 2019.

Dan Hyde The Mail on Sunday Assistant Editor

GLAXOSMITHKLINE: Emma Walmsley, the first female chief executive of the drugs giant, is an impressive operator. Last year, she oversaw a huge restructuring of GSK. She merged its consumer health arm (producing brands such as Sensodyne and Beechams) with that of rival Pfizer. Within three years, this newly enlarged arm will be spun off and listed, leaving GSK to focus on medicine. If a streamlined GSK proves nimble and able to outflank rivals, it bodes well for the shares.

Neil Craven Deputy City Editor

ASOS: Just when all eyes were on the struggling high street, the online retailer gave the City an unfestive shock a fortnight ago. The profit warning was galling given the board had confirmed growth forecasts to shareholders at the annual meeting at the end of November. Asos’s shares have halved in price and the suspicion among City scribblers is that they are now oversold, having been unloaded into already jumpy markets. Asos has recovered from shocks before and is worth a punt if only to enjoy the bounce and see good sense return.

Jamie Nimmo City Correspondent

REGAL PETROLEUM: It’s a bold call to tip last year’s biggest riser but I’ve gone for it. Ukrainian gas firm Regal Petroleum rocketed over 700 per cent in 2018, giving it a market value of close to £200 million. But I reckon it has a way to go. The Aim-listed firm has no debt, is lifting production and churning out cash. Its focus on natural gas has spared it from the recent oil price plunge. Ukrainian billionaire Victor Pinchuk quietly snapped up a quarter of Regal this year. If he launches a full takeover bid as he did seven years ago, it would be an early payday for investors.

William Turvill City Correspondent

ITV: The I’m A Celebrity broadcaster’s shares are at a five-year low, having fallen 25 per cent this year. My outlandish prediction is that political uncertainty in the UK will lift some time this year, confidence will rise, ITV’s advertising revenue will start to recover and the share price will follow. Either that, or things will get even worse for ITV before a global media firm mulls a generous takeover bid.

Helen Cahill City Correspondent

HSBC: Brexit uncertainty has punished bank stocks this year but Asia-focused HSBC is a fairly low-risk pick as the lender least exposed to British consumers and the UK’s trading relationship with the Continent. The bank beat profit expectations in its last set of results, boosting shares, but with its stock down 15 per cent this year, now might be the time to buy. HSBC remains sensitive to the outcome of the trade war between Trump’s administration and China, but improving relations should help lift HSBC’s shares in 2019.

Simon Neville City Correspondent

CENTRICA: The British Gas owner had a difficult end to 2018. In November bosses revealed they had lost 372,000 customers in the third quarter alone. Ofgem’s price cap will cost Centrica £70 million and smart meters have left households frustrated. But the price cap is now factored into the share price, desertions are slowing, and with seven suppliers going bust in 2018, Britons are wary of smaller outfits offering tariffs too good to be true.

Hamish McRae The Mail on Sunday City Columnist

SERCO: There’s an adage that when good managers and tricky sectors clash, the sector usually wins. This has been true for outsourcing. But at Serco I think managers will come out tops. Chief executive Rupert Soames and chief financial officer Angus Cockburn came from temporary power supplier Aggreko in 2014 and are slogging away at turning Serco around. A trading update has led to broker upgrades so this could be Serco’s year.