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Ken Fisher for Forbes - 6 Great British Stocks For Bulls And Bears

August 26, 2013 | About:

Holly LaFon

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Aug. 12, the date of this issue of FORBES, ushers in a most beloved annual tradition among Britain’s upper class: annual bird-shooting season. This multiday Scottish holiday is best savored with a beloved Labrador at your side and 20-gauge shotgun in hand. The bird of choice is, of course, a red grouse. The season for other prime fowl, such as partridge, pheasant and duck, starts later. And for the less gentlemanly? It’s open season on the common snipe.

From an investor standpoint Great Britain has been plagued by snipes who have bad-mouthed the U.K.–which represents 9% of the world stock market–for years. Skeptics complain about its being too much like America, with all of the bad parts and none of the good ones: internal problems, no growth, no hope.

Today even its biggest stocks sell for relative bargains. I think the time is ripe for bagging great British franchises. I’ve flushed a few out that are ready to take aim at:

BP (BP) -0.29%, formerly known as British Petroleum, is cheaper than the other big vertically integrated energy companies. Investors fear it will be tough to find new reserves. In the meantime, people keep guzzling gas. The stock sells at only seven times my 2014 earnings estimate and 30% of annual revenues and has a 4.9% dividend yield.

Strong consumer staples firms usually become market leaders as folks get giddy-drunk on a big bull market’s ascent. So buy one of the world’s largest boozemakers, Diageo (DEO). It’s a high-quality, moderate-growth story that has a 2.3% dividend yield. And if I’m wrong on the bull market? Consumer staples do relatively well during the early stages of a bear market as well.

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