Expert View

Wednesday, 2nd May 2012

What shares should I buy?

The continuing euro-zone debt crisis has had an impact on global growth and equity Investors need to be cautious about where to invest during this time of higher uncertainty. US mega cap stocks are currently receiving much institutional investor focus.

Apple is a technology giant which specialises in hardware and it is poised to deliver another year of record profits driven by continued momentum in its primary product lines. The recent launch of the latest iPad in March was well received by the market and the iPhone is also set to deliver another record year with a 67% increase in unit sales expected in 2012.

ExxonMobil is the world's largest integrated oil company, renowned for the strength of its balance sheet, the quality of its management and the return on capital employed ratios. The company has a daily production of over 4.5 million barrels of oil equivalent with a proven reserve base of 25 billion barrels of oil and has currently cash on deposit of $13 billion.

McDonalds is the world's largest restaurant chain with unrivalled brand recognition. It operates 31,000 restaurants in 119 countries; has generated earnings growth of 13% over the past ten years and offers high visibility of earnings in the current austere economic conditions.

Pfizer's share price trades at a discount to its peers because of fears over the loss of patent protection on its lead blockbuster drug Lipitor. Pfizer is now in the process of spinning off its non-core animal health and nutrition business to create shareholder value. This extra cash of over $23 billion will allow the company to develop new drugs, in-licence promising drugs at a later stage of clinical development and increase returns to shareholders.

Coca Cola is the world's largest manufacturer of soft-drink concentrate and syrups with a 50% share of that market worldwide. The company aims to double the amount of the Coca Cola beverage being consumed around the world by 2020 primarily by increasing demand in emerging markets where it recorded double digit organic growth in 2011.