WE voted for Europe with two new share tips last week as Theresa May finally invoked Article 50 of the Lisbon Treaty to begin Brexit divorce negotiations.
Anglo-Dutch consumer goods giant Unilever, with 150 million regular customers around the world. Is able to take a fairly relaxed view on the impact to its UK operations and investors are much more interested in how directors will respond to the failed bid from Kraft Heinz.
News could come as early as April 20 when the group is due to announce quarterly trading figures and analysts expect to hear of a sale or demerger of a chunk of the foods division which includes names such as Knorr, Lipton, Hellmann’s, Magnum, Marmite and Stork and could be worth upwards of £6 billion.
Such a move is likely to involve a return of cash to shareholders and a share restructuring to allow the company to continue its generous dividend policy which has seen payments increased by a compound rate of around 8 per cent for the last decade or more.
Thorpe Park and Alton Towers entertainment group Merlin is the other addition to our portfolios although we accept that UK visitor numbers may show a temporary blip as a result of the latest London terrorist atrocity.
Again, the UK is a relatively small part of the business and Merlin is a clear gainer from weakness in the pound with 70 per cent of profits now earned overseas following a string of new openings for attractions such as SEALIFE, LEGOLAND and Madame Tussauds on the Continent and elsewhere.
As usual, we have set a stop loss figure, 10 per cent below the current price, at which we advise selling the shares on any major setback.
Our existing share tips enjoyed a satisfactory week with all four investment portfolios showing some gain at our weekly review of progress on Wednesday mornings.
The 2017 selections stood out with an overall increase of 2.4 per cent, helped by a useful recovery in Clydesdale Bank owner CYBG after recent weakness and the 2014 list improved 1.4 per cent as a result of fresh investment support for Smiths Group and BAE.
The other two portfolios recorded fractional gains.
See John Phelps's tips table at www.heraldscotland.com/business
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