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Absolute Favourite Stock Picks

These top stocks are loved by a number of UK-based fund managers

Alanna Petroff 22 February, 2013 | 6:41PM

This article is part of Morningstar.co.uk's Equity Investing Week.

When a number of different fund managers are declaring that they like the same company and are buying in, perhaps you should take notice and consider the company for your own personal portfolio.

Over the last few months, fund managers across the UK have been coming into our Morningstar TV studio to take part in our "Fund Managers' Favourites" video series, and in many cases, their top equity picks have overlapped with one another.

Here are some of the companies that have been singled out by these fund managers as being their absolute favourites: 

Signet Jewelers (SIG)

Fund managers at Investec and Old Mutual have both declared that they had a sparkle in their eye when they looked over Signet's numbers. Signet is the largest jeweler in the world and the bulk of its sales (roughly 80%) come from the US. If you expect that the American economy is set to improve and jewellery sales are going to increase, then Signet might be suitable for you. The fund managers particularly liked that this company had economies of scale because of its massive size, which gave it a competitive advantage over smaller competitors.

Ashtead Group (AHT)

Ashtead Group has been singled out by fund managers at Standard Life, AXA Framlington, Henderson and Old Mutual

Ashtead is a plant hire company, which means that it owns a fleet of construction-related equipment that it rents out to customers who need to lift, move, dig, scrub, pump, ventilate, etc.

"We rent equipment so that our customers can focus on what they do best rather than maintaining and servicing equipment they may use only once a year," states the Ashtead company website.

"We expect [Ashtead] to continue to perform well, as capital-constrained customers increasingly hire rather than buy machinery," said David Cumming, the head of UK equities at Standard Life Investments. "With their smaller competitors also struggling for financing to replace and upgrade their fleet inventory, we expect Ashtead to gain market share." 

NCC Group (NCC)

This technology group, which works in the "ethical hacking" space, is a favourite of fund managers at Liontrust and Slater Investments.

The company is well-known for helping other companies test their online infrastructure and information security.

"Some companies are facing up to 50,000 attacks a day, and this is a massive issue," says Liontrust fund manager Anthony Cross. "So, they will hire people like NCC to come in and to do investigations and trouble-shoot and test to make sure the Internet for that company is really robust."

The company is also a dominant player in software escrow.

Other Absolute Favourites

These companies have also been singled out by multiple fund managers as being "top picks":

H&T Group (HAT)

Oxford Instruments (OXIG)

Senior (SNR)

DS Smith (SMDS)

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Securities Mentioned in Article
Security NamePriceChange (%)Morningstar
Rating
Ashtead Group PLC1,059.00 GBX2.32-
H&T Group PLC174.63 GBX0.72-
NCC Group PLC203.25 GBX-0.37-
Oxford Instruments PLC1,090.00 GBX4.21-
Senior PLC280.90 GBX0.29-
Signet Jewelers Ltd GBP7,088.00 GBX-0.25-
Smith (DS) PLC283.10 GBX0.04-
About Author Alanna Petroff

Alanna Petroff  is a financial journalist with Morningstar UK.