It’s the season for giving, and as we’re a merry lot here Proactive Investors, we’ve picked out four companies which we think could add some festive spice to investors’ stockings.
Airlines tend to get a boost over the holiday season, with many travelling to see family and others looking to escape the winter sun.
The surge in demand tends to be reflected in higher ticket prices, which is always good for carriers’ bottom lines, especially at the moment, when competition is eating into margins.
British Airways owner IAG
We’ve plucked for International Consolidated Airlines Group PLC (LON:IAG) – the owner of British Airways, Vueling and Iberia – as our pick of the airlines.
“Prospects have improved in recent months as the company said in October it expected full-year operating profits to rise by around €200mln, and then raised its longer-term earnings growth forecasts in November,” says Ian Forrest, investment research analyst
“Brexit uncertainty remains a concern but the shares are good value relative to peers Easyjet and Ryanair, and are recommended for investors seeking growth but willing to accept a higher level of risk.”
Diageo for the drinks
Not all of us will be lucky enough to jet off over Christmas, but almost all of us will make the most of not having to wake up early for work and knock back a beverage or twenty.
That should play into the hands of alcoholic drinks giant Diageo PLC (LON:DGE), the company behind Johnnie Walker Guinness, Baileys and countless others.
“The company has enjoyed good sales growth in the US market and is increasingly looking to major emerging markets such as India,” explains Forrest.
“Cost reduction and good cash generation support steady rises in dividends and share buybacks. We recommend the shares for lower risk investors seeking a balance of growth and income.”
Christmas money spent on boohoo
After a few glasses of vino, some people, including myself, will become a bit more liberal with their cash and log online to spend their Christmas monies.
One of the destinations of choice for free-spending millennials is multi-billion-pound online fashion retailer boohoo Group PLC (LON:BOO).
The sector was rocked just before Christmas when rival Asos PLC (LON:ASC) issued a shock profit warning on the back of a terrible November, although boohoo moved quickly to reassure investors that all was still going swimmingly with its business.
Forrest says: “The widespread trend among consumers to look online for clothing, instead of making the trip to the high street, is set to continue so we recommend the shares as a ‘buy’ for medium to high-risk investors seeking growth.”
Gift wrap maker IG Design
Anyone gifting those clothes to a friend or loved will need something to wrap it in, right? Step forward IG Design Group PLC (LON:IGR).
The AIM-quoted company makes Christmas cards and gift wrapping, as well as a much wider range of stationery and creative play products, which should make it a clear winner this holiday season.
“The company has grown steadily in recent years and now sells its products in 200,000 stores in 80 countries around the world,” says Forrest.
“Its most recent acquisition in the US offers good growth potential in what is a large market. In November the company reported a 76% increase in underlying pre-tax profits to £18.5mln and said full-year earnings would be better than previously expected. We recommend the shares as a ‘buy’ for higher risk investors seeking growth.”