Stocks to watch in November

Associated British Foods

Associated British Foods deserves a place in any low-risk portfolio of shares. The business, still 50% owned by Garfield Weston’s founding family, has been a great growth story in the past few years of recession. Revenues have almost doubled in six years while profits - £500 million back in 2007 - are expected to reach £973 million for the year just ended.

Currently analysts are targeting profits of £1.1 billion for this year. The business sprawls across the globe in sugar, agriculture, groceries and retailing and includes brand names such as Ovaltine, Ryvita and fast-growing Primark clothing stores chain.

Latest trading returns confirm the market’s optimism about upcoming results. The shares are up 25% this year and sell on about 14 times expected earnings for the current year. Not cheap but high quality and consistency never is.


Budget airline easyJet is another family business with great growth potential but higher risk with a much more controversial reputation both in the City and among its customers. Founded less than 20 years ago by Sir Stelios Haji-Ioannou, it is expected to have revenues of more than £4 billion this year. Sir Stelios remains a major shareholder and owner of the brand but is no longer on the board.

Controversy over the company is receding as profits improve and dividends have started to be paid, and for customers there has been the recent decision to abandon the seating "free-for-all".

Profits for the year just ended are expected to reach £282 million (£248 million last time) and for the current year the consensus forecast is for £322 million. Much of the outlook, though, hinges on oil fuel prices, which at the moment look likely to remain high. The shares sell on 8.6 times expected earnings for this year.


Bowleven listed on the Alternative Investment Market eight years ago and has built a £200 million market value on oil and gas exploration success in its chosen region of Cameroon. The track record for the drilling programme to date has been very successful and there are now inevitable rumours that the group could be the bid target of a larger group or at least go into partnership with a major company.

The shares are clearly speculative as there are no signs as yet of profitability. They have virtually halved from their peak earlier this year on so far unfounded fears of weakness in oil prices. They now seem to be swinging back into favour.


Fenner has been a consistent performer in that least glamorous of industries - reinforced polymer technology. Supplying a wide range of industries, it continues to grow its share of the global market and revenues continued to climb through the recession.

Profits for the year just ended are expected to rise from £69.6 million to £101 million while for the current year they could reach £110 million. The shares sell on 9.4 times prospective earnings for the current year and yield a useful 3.1%. The dividend record has been progressive and the payment remains covered by nearly four times earnings.

Renew Holdings

Intriguing building sector minnow Renew Holdings is very much in favour in the market these days. It concentrates on doing essential maintenance work for weighty clients such as London Underground, Northumbrian Water, Network Rail and Sellafield.

That makes it look resistant to whatever shocks that the recession may have in store. Profits for the year just ended could reach a record £9.4 million compared with just £2.46 million last time. They are expected to top £10 million this year. The shares yield 3.6% and sell on 6.8 times expected earnings for this year.