BP – Josh Ausden

The company seems to have recovered well from the 2010 oil-spill crisis, though the share price is still some way off what it was prior to the disaster. It pays a good dividend which I think is important during these uncertain times, and from a growth perspective it appears ready to expand its business.

Sheridan’s view – BUY

BP has just reported results for Q2 which fell short of market expectations. The company blamed the poor performance on the weaker oil and gas prices in the global markets as a result of the weakening economic environment. Also, asset write downs (US shale gas refineries and Alaska project), have impaired the underlying figure.

The group is continuing with its plan to become a smaller and leaner operation and has already entered into agreements to sell $24bn of assets since 2010. The total target is set to become $38bn before the end of 2013.

The reshaping of the portfolio will result in a leaner operation and increase the capital available to invest in more efficient facilities. Although near term production will be sacrificed, we expect longer term gains. The offloading of certain assets, such as TNK-BP, will enable it to become free of political interference and better focussed.

It also pays a decent dividend, which as Josh points out is important to investors.


Weir Group – Thomas McMahon

I bought Weir Group last week because I’m looking for ways to benefit from the shale gas revolution on the long side, and this company makes pumping equipment used in the production. It also has strong emerging markets exposure which should help it in the coming years.

Sheridan’s view – HOLD

We have in the past been positive on the company and although linked to the price of commodities, the group has a solid order book of £1.3bn.

The share price has been volatile of late, as concerns have mounted over the potential for shale gas demand in the US to decline (US gas prices have been falling to 10 year lows) and fears over cuts in mining expansion. This led to some significant short positions being taken on the stock.

There have been growing concerns over mining companies cutting back on expansion plans, which would result in a fall in demand for Weir’s products. However, July results highlighted the strength in the mix within the business and the company was confident of improved performance in the second half, especially in Minerals, Power and Industrials.

The shares trade on a historically attractive rating, but in the present climate we would suggest a hold, although we would not want to put investors off drip feeding into the stock.


RPC – Mark Smith

I’ve been thinking about adding RPC to my portfolio recently. The packaging company is behind the Heinz Baked Bean container that goes back in the fridge once you’ve opened it. It’s a stock I’ve heard fund managers talk about quite frequently. Its stood up relatively well during the market sell-off and prospects for dividend growth are said to be strong.

Sheridan’s view – UNDECIDED

We don’t currently cover RPC, however it is one we have been watching. It looks still good value despite the acceleration in its share price in the last few years. Packaging company stocks have done quite well since the stock market collapse. Our preferred in this sector is Bunzl; others to watch are Rexam and Intertek.

Consensus forecast earnings look set to jump and indicates the forecast P/E not looking too challenging at 9.7 times 2013 earnings, which is slightly below the sector forecast average at 10.8 times.

Despite the global economic slowdown, RPC’s first quarter results saw operations continue to trade in line with management expectations supported by growth in higher added value products. Looking ahead RPC expects to see some margin improvements as polymer prices fell in June and July.


GlaxoSmithKline – Anthony Luzio

I bought GlaxoSmithKline in May 2011 after FE Trustnet published an article in which Neil Woodford said there was “unprecedented value in pharmaceuticals”. At the time it was the stock I was the least enthusiastic about, but following the extremely turbulent past 12 months, it has been by far the best-performing of all my investments, up by around 20 per cent. I decided not to reinvest dividends – even though this course of action is not recommended – as I originally planned to invest for a short period of time and thought this would minimise charges when I came to sell the stock.

Sheridan’s view – BUY

After a long period of underperformance the shares had an excellent 2011. The restructuring programme remains on track to deliver annual savings of £2.8bn this year. Looking forward, future improvement should be helped by new products, diversification and increasing exposure to emerging markets.

The group remain confident of their late stage pipeline, with a potential to launch eight new drugs and vaccines in the next 24 months; this should be a material driver for organic growth.

The business is very cash generative and is committed to using this to increase dividends, share buybacks and bolt-on acquisitions. The £2.6bn proposed acquisition for Human Genome Sciences (HGS) can be seen in a positive light and should be completed by Q3.

Glaxo is also one of the few pharmaceutical companies researching both medicines and vaccines for the World Health Organization's three priority diseases - HIV/AIDS, tuberculosis and malaria, and have developed some of the leading global medicines in these fields. The yield is attractive at around 5 per cent and the growth story also looks to be improving.

We recommend a ‘buy’ for stability in a portfolio and this stock should appeal to low risk and balanced investors.