Can these 2019 FTSE 100 winners continue surging in 2020?

first_img Alan Oscroft | Monday, 30th December, 2019 | More on: AVV HLMA “The trend is your friend until the bend at the end” is true enough, and it lies behind the idea of momentum investing — you stick with a stock while it’s rising, and sell when it turns down.It’s clearly a nice idea, but you need to be able to get your timing right. If you can’t (and here’s a hint — nobody can, consistently) you could be left sitting on some big losses if the price crashes, and soaring growth stocks can crash quickly.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…SoftwareThat’s a large part of the reason I wouldn’t buy Aveva Group (LSE: AVV) shares now, after their remarkable 97% rise so far in 2019 (and I know there’s only a day to go but I don’t want to tempt fate, so I’ll stick with ‘so far’).The company develops software for engineering and industrial businesses, and we know how software companies can soar in value. Aveva has seen revenue and profits climbing over the past few years, and a lot of that revenue is recurring due to the way the company charges. It’s also been expanding its new sales too, and is clearly doing very well.So, I’ve nothing against Aveva as a business — it’s just the kind of great business that even Warren Buffett might like, if he went for high tech stocks. In fact, he’s noted for suggesting you should strive to buy a wonderful company at a fair price. But that’s my problem — I just don’t see today’s Aveva price as a fair one.As well as 2019’s gains, Aveva shares are up 260% over five years, so I really wish I’d bought some back then. But that rise has pushed them to a P/E multiple of nearly 44 based on expectations for the year ending March 2020, and with EPS predicted to grow by an unexciting 18%, dropping to 14% for the following year, I just think that’s too expensive.SafetySomething similar has happened to Halma (LSE: HLMA), whose share price has gained an only slightly less impressive 60% in 2019 — and 213% in five years.The company is also in a high-tech business, specialising in safety, medical, and environmental technology, and a number of worldwide developments are helping drive its business.Halma’s earnings have been growing steadily, though at a slower rate than Aveva’s in the past couple of years. But the share price has climbed ahead of that, pushing the P/E up from around 22 in 2015 to a forecast 37 for the current year (again to March 2020). While Halma is in another market that’s likely to see strong demand over the long term, again I think the share price has got too far ahead of itself. So this is another I see as overvalued now and another I’ll pass up on.Buying Halma based just on momentum would have been successful in recent years, but the problem with a rising trend, as always, is knowing for how long it will rise. Been climbing for 12 months? I’ve seen stocks crash after 13 months. Five years of steady gains? I’ve seen them crash in year six.Again, I think this is a potentially wonderful company, but again I’m not seeing an attractive share price. I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. See all posts by Alan Oscroft “This Stock Could Be Like Buying Amazon in 1997” Simply click below to discover how you can take advantage of this. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge!center_img Our 6 ‘Best Buys Now’ Shares Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Image source: Getty Images. Enter Your Email Address Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has recommended Halma. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Can these 2019 FTSE 100 winners continue surging in 2020?last_img read more

The State Pension triple lock could be scrapped. This is what I’d do to protect myself

first_img I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. The State Pension triple lock could be scrapped. This is what I’d do to protect myself The State Pension is a source of much frustration for many people in the UK. It’s not hard to see why.For starters, the new State Pension is currently just £175.20 per week. That equates to just £9,110 per year, well below the amount you realistically need to live a comfortable retirement.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Secondly, the State Pension age is rising. In the past, you could claim yours at 65. However, by 2028, the State Pension Age will hit 67 for both men and women. When you consider the average life expectancy in the UK is 81 years, that’s not ideal.The State Pension triple lock could be scrappedMaking matters worse, there’s now talk the State Pension’s triple lock could be scrapped. This is the mechanism that ensures annual increases are decided by whatever is the highest out of price inflation, average earnings growth, or 2.5%.The reason the triple lock could be scrapped is that, next year, average earnings may soar due to the fact many people in the UK have been furloughed this year. This would mean hard-pressed taxpayers would essentially have to fund a large pension increase for those who are retired. So, the triple lock could be scrapped, meaning more uncertainty in relation to future State Pension increases.All in all, it’s a grim situation for those in, or approaching, retirement.Protect yourself now Of course, if you’re yet to retire, there are ways to protect yourself against the State Pension weakness. Plan ahead, and you may not have to worry about the size of the State Pension, or issues such as the triple lock.When it comes to saving for retirement, one of the smartest things you can do is save into your own pension. The reason is that all contributions into a private pension come with tax relief. This is essentially a reward from the government for saving for retirement. Basic rate taxpayers receive 20% tax relief, meaning that an £800 pension contribution gets topped up to £1,000.Investing your retirement savings properly is another strategy that can help protect you from the State Pension. If you’re not going to need access to your retirement savings for a few years, it could be a good idea to invest some of your money in shares.While shares can be volatile in the short term, they tend to generate much higher returns than other assets, such as bonds and cash savings, in the long run. Historically, shares have produced returns of around 7-10% per year for investors over the long term.That kind of return could make a big difference to your retirement savings. Invest £10,000 per year (you’d only need to invest £8,000 if saving into a pension once you factor in tax relief) and earn 8% per year on your money. Then you could be looking at savings of nearly £150,000 within 10 years.Investing for retirement has never been easierInvesting doesn’t need to be complicated. It’s possible to generate great returns with a simple long-term, buy-and-hold strategy. As always though, the key is to start saving and investing as soon as possible. The sooner you start planning for retirement, the more protected you’ll be from a meagre State Pension. I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Edward Sheldon, CFA | Saturday, 20th June, 2020 Views expressed in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Image source: Getty Images. Simply click below to discover how you can take advantage of this.center_img “This Stock Could Be Like Buying Amazon in 1997” Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Our 6 ‘Best Buys Now’ Shares Enter Your Email Address Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! See all posts by Edward Sheldon, CFAlast_img read more