Premium content from Motley Fool Hidden Winners UK
Our monthly Best Buys Now are designed to highlight our teamâs three favourite, most timely Buys from our growing list of small-cap recommendations, to help Fools build out their stock portfolios.
“Best Buys Now” Pick #1:
City of London Investment Group (LSE:CLIG)
Why we like it: âHistorically, dividends have made up an important part of the marketâs total return, and perhaps for this reason investing for income is popular with UK investors. City of London Investment Group (LSE: CLIG), is a chunky yielder with a long-term record of growing income well ahead of inflation. Although dividend growth at the company has tailed off in recent years, and is largely dependent on the fund manager attracting new client money, weâre optimistic about the companyâs attempts to win new business.
âFund managers generate revenue by attracting investors into their funds and receive fees as a percentage of clientsâ assets. One of the attractions of fund managers is that they have significant operational leverage â revenues typically grow at a rate thatâs proportional to funds under management, and if costs stay the same, profits should grow at a faster rate. The company is cutting costs and, if a recovery kicks in and sales increase after costs have been reduced, then thereâs a chance CLIG might enjoy strong profit growth.â
Why we like it now: Last month, City of London released its first quarter trading update, revealing net inflows of US$224 million across the Group’s strategies. This was driven by strong performance in International Equity strategies at CLIM and Municipal Bond strategies at KIM. These positive results may indicate the company’s resurgence after a challenging period in capital markets. Additionally, as previously announced, cost savings of approximately US$2.5 million per annum are expected to be fully realised in the next financial year. Currently, CLIG is trading with a 9.5% dividend yield. With sales activity showing signs of gaining momentum, the current price appears to offer a bargain.
“Best Buys Now” Pick #2:
Redacted
Want All 3 âBest Buys Nowâ Picks? Enter Your Email Address!
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.
The post Just released: our 3 top small-cap stocks to consider buying before June [PREMIUM PICKS] appeared first on The Motley Fool UK.
5 Shares for the Future of Energy
Investors who don’t own energy shares need to see this now.
Because Mark Rogers — The Motley Fool UK’s Director of Investing — sees 2 key reasons why energy is set to soar.
While sanctions slam Russian supplies, nations are also racing to achieve net zero emissions, he says. Mark believes 5 companies in particular are poised for spectacular profits.
Open this new report — 5 Shares for the Future of Energy — and discover:
Britain’s Energy Fort Knox, now controlling 30% of UK energy storage
How to potentially get paid by the weather
Electric Vehicles’ secret backdoor opportunity
One dead simple stock for the new nuclear boom
Click the button below to find out how you can get your hands on the full report now, and as a thank you for your interest, we’ll send you one of the five picks — absolutely free!
Grab your FREE Energy recommendation now
More reading
Michael Burry just bought 175,000 shares in this FTSE 100 company
£5,000 in savings? Here’s how I’d aim to start making powerful passive income today
My best FTSE 250 stock to consider buying now for passive income while itâs near 168p
2024âs a great year to earn passive income! Hereâs how Iâd do it for £10 a week
£10k in an ISA? How does £840 passive income a year sound?
The Motley Fool UK has recommended City Of London Investment Group Plc.Â
