It’s Time to Buy Post-Brexit British Stocks

The United States may not be as directly linked to the decision to leave the EU, but many American firms do have significant overseas operations. I am looking for large multinationals like Coca-Cola (KO) and General Electric (GE) to have an irrational drop in price; GE is providing a compelling opportunity, with shares trading almost 5% down on Friday. I already hold about 2% of my portfolio in BP, but will look to add another 2% on the heels of the referendum.

Its earnings estimate for the current year has improved by 25% over the last 30 days. Avino has a Zacks Rank #2 and its projected growth for the current year is more than 100%. Its earnings estimate for the current year has improved by 16.7% over the last 30 days. AXA has a Zacks Rank #2 and its projected growth for the current year is 12.2%. Its earnings estimate for the current year has improved by 1% over the last 30 days.

Studies on the impact of the Brexit referendum

The increasing dislocation in capital markets and tightening credit standards have created significant opportunities for investors with development and construction expertise, access to capital, and strong balance sheets. Providing that there is a long-term business plan and sufficient flexibility, https://investmentsanalysis.info/ the referendum outcome has created the context for deploying capital in long-dated counter-cyclical strategies at attractive risk-adjusted returns. Listed real estate in the UK was the hardest hit, with total returns plummeting a stunning -31% in the first two trading days following the vote.

Fishing industry were one of the largest obstacles to reaching a trade deal. On the surface, the trade deal would seem to be a win for the U.K. Government, the agreement will increase the quotas for British fishermen over five years by an amount equal to 25% of the value of the EU catch in U.K.

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According to E&Y, Brexit has caused several geopolitical changes which have made cross border investments even more complex. Additionally, the volatile nature of exchange rates has also dulled the enthusiasm for deal making. Since the vote took place in June, the pound has lost nearly a fifth of its value versus the dollar. «Obviously there is supply bottlenecks globally, but they are being extenuated in the U.K. from Brexit as well, so it is not a preferred market of ours from an equity market perspective,» Brice said. It appears that firms on both sides of the English Channel had been stockpiling goods and supplies, possibly as insurance against a failure by authorities to agree a trade deal.

The over-riding reason to be invested in the U.S. real estate market through exchange-traded U.S. equity REITs is not to protect against anything as specific as Brexit. Rather, the reason to have a meaningfully diversified investment portfolio with significant exposure to U.S. listed real estate alongside U.S. and non-U.S. Stocks, bonds, and cash (for immediate liquidity), is because unexpected events happen all the time, but asset classes—real estate, stocks, bonds, and cash—respond differently to them. In this case, geographic diversification helped mitigate the effects of exposure to the UK while asset-class diversification helped further insulate investors from the fallout of developments in an overseas market. In the rest of Europe, stock investors lost more than real estate investors as the Brexit vote engendered well-founded concerns about the continent’s macroeconomic prospects. Europe ex-UK stocks lost -12% in total returns over the initial two trading days, and as of July 15th were still down -3.8%.

Brexit ‘permanently damaged’ UK economy, Michael Saunders says

Section 7 provides an additional analysis involving an event study analysis. Reynolds American and Home Depot are certainly safer plays than companies heavily exposed to the eurozone, but investors should also note their weaknesses. Reynolds American, the second-largest domestic tobacco maker after Altria (MO), acquired Lorillard, the third-largest player, last year. Last quarter, the newly combined company controlled nearly 35% of the U.S. cigarette market with brands like Camel, Newport, Pall Mall, and Natural American Spirit. Pan American Silver has a Zacks Rank #2 and its projected growth for the current year is more than 100%.

In the weeks that followed, property transactions were halted as investors’ renegotiated deals or pulled out altogether. A pause was inevitable amidst a shock that was political rather than economic. A few deals did go through What stocks to buy after brexit albeit at reduced prices and shielded deal structures. Pharmaceutical companies are concerned about potential differences in EU and U.K. Pharmaceutical firms AstraZeneca and GlaxoSmithKline established parallel labs in the EU.

Market Update: After The Brexit Vote – Which Type Of Stocks To Buy Now (Video)

You could have had Exxon Mobil (XOM) at $65 and a nearly 5% yield or Chevron (CVX) at $69 and a nearly 7% yield. ConocoPhillips (COP) cut its dividend to only $1.00 annually per share, but the resulting crash to $30 per share afterwards provided the chance for 50% gains. A late August swoon in 2015 also offered deals in nearly every firm on the market, and an early year downturn this winter also provided discounts on stocks across the spectrum. As we write, the Brexit trade deal is being rubber-stamped across Europe, and the FTSE 100 is up in post-Christmas trading. The UK remains by far the largest equity market in Europe, even though the FTSE 100 stocks have underperformed European equity markets by 40% the last five years. REITs historically have delivered competitive total returns, based on high, steady dividend income and long-term capital appreciation.