UK stocks are finally turning a corner after years of underperformance, a chief investment officer says, stressing that valuations look “very cheap”.
U.K. FTSE 100 Up about 11% in the past three months, while the broader FTSE 250 The index is more than 9% higher.In comparison, the U.S. S&P 500 Index The trading price increased by about 6% during the same period.
Dan Boardman-Weston, chief executive and chief information officer of BRI Wealth Management, told CNBC’s “Squawk Box Europe”: “People are finally realizing that there are actually a lot of great companies in the UK and they are priced very well compared to other markets. Cheap.
He gave the example of oil majors shell Its price-to-earnings ratio is significantly lower than that of its U.S. rivals. A low price-to-earnings ratio (the ratio of a company’s stock price to its earnings per share) may indicate that a stock is undervalued.
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Boardman-Weston said there were a number of reasons driving British stocks higher, including a period of relative political stability after several years of turmoil and “investors just realizing that British stocks are cheap.” He also cited a “significant increase” in the number of mergers and acquisitions in recent months.
Previously, private equity group EQT confirmed over the weekend that it was in advanced negotiations to acquire the video game service company. keyword studio. EQT is offering £22.50 per Keywords share – a premium of more than 70% to Friday’s closing price of £14.70. Keywords’ stock price rose more than 60% on Monday morning after the news broke.
“It just goes to show how undervalued the UK equity market is, especially small and mid-caps,” Boardman-Weston said. “If the end buyer is willing to pay a 70% premium and they still think they can get numbers at that level , which just goes to show you how cheap the UK market is.”
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