After a tumultuous year in the markets with Brexit uncertainty, the threat of trade war and rapidly changing consumer habits, the FTSE 100 suffered its worst year since the financial crisis in 2018, ending it 12.5 per cent down.
While there is no sign that 2019 will be any less eventful, with the date Britain is set to leave the EU fast approaching and Donald Trump still in the White House, the City A.M. editorial staff have picked a selection of stocks they hope will fare well in the coming year.
Alexandra Rogers Law, white collar crime and transport reporter
Go Ahead Group: Go Ahead is just one of many train companies to have attracted little but bad press thanks to the timetable chaos in May. However, the firm seems to be making amends with the government and its shares have held firm in spite of the troubles. The company has also diversified beyond the UK market, with rail or bus wins in Germany, Ireland and Norway.
Ryanair: After a torrid year of industrial unrest, cancelled flights, concerns over Brexit and a profit warning last October, Ryanair may fall into the category of unloved, and perhaps unvalued, stocks. It may not take much for Ryanair to surprise on the upside
August Graham Energy and mining reporter
Clas Ohlson: It may have closed all but one of its stores in the UK and several in Germany, but hardware specialist Clas Ohlson is still one to watch over the next year. Having just entered her second year in the post after joining from Ikea, chief executive Lotta Lyrå will hope that pulling out of unprofitable markets will help the business in 2019.
Elan Oil and Gas: With a newly refinanced $75m loan facility at its back, Eland Oil & Gas will look forward to another year of growth after its shares increased almost 50 per cent this year. Its low production costs help get it healthy netbacks and if oil prices recover after Opecs cuts that will also boost the share. At around 100p the stock is still undervalued and Peel Hunt puts its target price at 160p.
Callum Keown Banking, economics and markets reporter
Go Compare: Go Compare shares have halved in the second half of this year but it could be a completely different year by comparison in 2019.
The company, perhaps most famous for its adverts and jingles, launched its Weflip service to help customers switch energy provider in October, which should generate share price movement.
On the Beach: Travel operators will no doubt be under the spotlight again in 2019, particularly if the UK has another hot summer. On the Beach flourished this year amid the heatwave by being flexible and cutting marketing costs. It could be another strong year for the firm as other providers struggle.
Emily Nicolle Technology reporter
Apple: After becoming the worlds first trillion-dollar public company earlier this year, Apples share price took a hit as Trumps trade war affected its ability to meet demand for its products. But the problem is a temporary one: if demand stays high, Apple will bounce back bigger and better than ever.
Tesla: Tesla has been one of techs most volatile stocks this year, with share price fluctuations caused every time its eccentric boss Elon Musk goes on Twitter. But after hitting profitability last quarter and with new products in the pipeline, Teslas future success as a business is looking brighter by the minute.
James Booth Corporate law and insurance reporter
Berkeley Group: Berkeleys bet on building houses in London looks a good one. Despite short term fluctuations in demand, Londons demand for new residential property is voracious and current levels of construction are not doing enough to fill that need.
Burford Capital: Burford has set the benchmark for litigation funders, delivering consistently high returns and wowing investors. If it can continue to back the right cases next year it could be one to watch for 2019.
James Warrington Telecommunications, marketing and media reporter
Comcast: As the dust begins to settle on Comcasts year of duels with Disney, the US conglomerate is emerging as a solid bet for 2019. While some eyebrows have been raised at the £30bn price tag for Sky, its likely Comcast will reap the rewards of its move into the European market.
S4 Capital: Sir Martin Sorrell has not wasted a second with S4 Capital. The WPP founder has already secured two acquisitions and poached top talent for the firm. The veteran ad boss says his new venture is a “peanut morphed into a coconut”. Next year will determine just how large it grows.
Joe Curtis Digital editor
AJ Bell: Shares in broker and online trader AJ Bell soared after its IPO earlier this month, and its numbers suggest its stock could continue to climb in 2019. Bell is enjoying double digit growth across both its top and bottom lines, while its 25 per cent rise in assets under management outstripped the recent 16 per cent rise seen by larger rival Hargreaves Lansdown, which went public more than a decade ago.
Microfocus: The London-listed IT company looks ready to recover from a brutal year in which shares dived 44 per cent after a revenue warning related to its ill-fated £6.6bn purchase of HPE Software. With a new CFO, the sell-off of Suse complete, full-year revenue at the higher end of guidance and an extended share buyback scheme, enriching shareholders should be one New Year's resolution Micro Focus can expect to tick off.
Josh Martin Night editor
Thomas Cook: November and December have proved to be the holiday period from hell for package travel specialist Thomas Cook, so things can only get better in 2019. Borrowing a line usually reserved for fashion retailers, the company blamed the weather for its weak performance as the sunshine kept Brits on home turf over the summer. However, this is unlikely to be repeated to the same extent in 2019 and the company will benefit from decreased airline seat capacity on certain routes and passengers returning to former favourites Turkey and Egypt.
Anglo American: Miners are a safer bet when looking for returns in a volatile Brexit environment as they are shielded from the weaker pound and fickle consumer spending. Anglo American looks to be ahead of the pack and continues to improve guidance on production and margins (now due to be up by around three per cent in 2019), while costs reduce further. The De Beers diamonds owner will shine even brighter once the trade standoff between China and the US subsides and commodity prices strengthen.
Louis Ashcroft Professional services reporter
New York Times: It may be called the Gray Lady, but the New York Times has seen a lot of green lately. Helped by a massive Trump bump at the end of 2016, it has rapidly increased digital subscriber numbers, and is growing revenue faster than many online giants.
Pearson: After several years in the doldrums, Pearsons turnaround after shedding several units seems properly underway. The publishers price is gradually rising, and it is having some success in making its intellectual property work online – a signal that better times may be ahead.
Luke Graham Features writer
Disney: The House of Mouse looks set for a bumper 2019. Along with a slate of movies all likely to make billions at the box office, including Captain Marvel, Avengers: Endgame, and Toy Story 4, the company is set to launch Disney+, a Netflix-style streaming service. It is slowly pulling content from other streaming channels, so that its own may become the only place to stream classic Disney, Marvel and Star Wars films and related TV shows.
Jupiter Asset Management: JUP was the first individual stock I've ever invested in. I bought into the company back in February, hooked by the appealing dividend and potential growth story. Since then my investment is down 42 per cent. Here's hoping things improve in 2019
Michael Searles Sports reporter
Amazon: The e-commerce giant has revolutionised distribution with its fulfilment services that allow businesses across the world to sell products with next day delivery. Amazon Prime specifically has been a key part of its growth and under CEO Jeff Bezos the company continue to compete on numerous fronts with its streaming services, innovative technology, and now food delivery too."
Tencent: The tech giant continues to dominate the Chinese digital market with its own streaming services and also has shares in Tesla, Spotify and Snapchat. Despite a difficult year due to China's freeze on video game approvals, Tencent will look to bounce back in 2019 when approvals are set to be resumed with the online gaming industry continuing to grow at a rapid rate.
Seb McCarthy Retail and property reporter
Segro: Few FTSE firms have benefited from the changing retail winds quite like Segro. While 2018 was a bleak year for many of the UKs high street retailers, industrial property developers like this one have seen profits soar, and there is little sign of a slowdown into 2019.
Ten Entertainment: The bowling operator has battled through fluctuations in the weather to deliver profits this year. Demand for its food, drink and leisure experiences has encouraged Ten Entertainment to expand its portfolio, and a number of analysts are feeling confident that the ten-pin bowling company is well-set for the year ahead.
