Blue-chip mining giant Anglo American (GB:AAL) has roared back into the ranks of the top 10 UK-listed companies based on its popularity with the world’s best-performing investors whose holdings Citywire Elite Companies tracks. A table of the full top ten can be found at the end of this article.
Anglo’s climb into the UK top 10 this month follows rival BHP (AU:BHP) abandoning a $49bn bid for the company.
BHP walked away at the tail end of May after its target denied it more time to firm up an offer. The move, after a six-week pursuit by BHP, provided a short-term boost to Anglo’s share price aided by its own restructuring proposals, though the shares have subsequently fallen back.
BHP had been keen to secure access to Anglo’s lucrative copper mining operations. The metal is seen as crucial for the success of the energy transition but there is growing speculation about a supply crunch due to the lack of new mines being developed.
One of the main reasons the pair failed to reach an agreement was that BHP’s proposal meant that Anglo would have had to jettison its platinum and iron ore businesses in South Africa.
Both Anglo and BHP have top AAA Elite Companies ratings based on heavy backing by leading portfolio managers, all of whom are among the best-performing 3% of 10,000 monitored by Citywire. Anglo, meanwhile, ranks eighth among all British companies this month.
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Elite Investors’ most-favoured UK stock in June is Shell (GB:SHEL). The blue-chip energy group regularly vies with oil and gas rival BP (GB:BP) and pharmaceuticals giant AstraZeneca (GB:AZN) for the number-one position on Elite Companies’ UK list.
The most popular holdings in the UK tend to be large-cap businesses, with relatively lowly valuations and strong profitability (measured by return on equity in the graph below). As a group, they also produced attactive cash flows and pay chunky dividends.
As well as Anglo, there are two other new arrivals in June’s UK top 10 since we last looked at the list.
Standard Chartered (GB:STAN), the London-listed Asia-focused banking group, joins in ninth position after an absence of several months. The bank, one of two financials businesses on the list – the other being Barclays (GB:BARC) – reported better-than-expected first-quarter results at the beginning of May.
The bank, which has been cutting costs and simplifying its structure, performed strongly across its various business lines during the first quarter, but did particularly well in wealth management.
StanChart’s chief executive, Bill Winters, in February bemoaned the bank’s ‘crap’ share price as he reported soaring profits for the fourth quarter. The shares have since increased in value by just over 15% but still trade on less than six times forecast earnings.
Also new to the top 10 is aerospace and defence group BAE Systems (GB:BA), whose shares have almost trebled over the past three years amid increasing geopolitical hostilities globally.
Over the past two months, the shares have benefited from the declaration by UK prime minister Rishi Sunak that a Conservative government would increase spending on defence to 2.5% of GDP by 2030.
Opposition leader Sir Kier Starmer later made the same promise meaning that, with the UK readying for a general election next week, whichever of the two main parties comes to power, there is a commitment to lift the defence budget.
All 10 companies are rated AAA using Citywire Elite Companies’ groundbreaking ratings methodology.
The UK top 10
The table is ordered by popularity with the world’s best portfolio managers.
Source: FactSet. Forecasts based on next 12 months.
