Winter warmers: Five stocks taking advantage as daylight savings end

Chris Salih 23/10/19 in Strategy

This Sunday marks the official end of Daylight Saving Time and British Summertime.

The good news is that the clocks go back an hour, which means we get an extra hour in bed this Sunday. The bad news is we’ll all soon have to get used to it being dark outside at 4pm.

Daylight savings were first introduced over a century ago, with many countries using it at various times, particularly since the 1970s energy crisis. It’s often been a point of contention with proponents claiming it promotes good health and energy saving, as well as reducing traffic accidents and crime.

Opponents do not believe the energy savings are conclusive and point to the negative impact it has on people’s health: a 2012 study by the University of Alabama found that the risk of heart attack surges by 10% on the Monday and Tuesday after moving the clocks ahead each spring*. Thankfully – for this weekend at least – these statistics seem to be balanced by the return to standard time – the study also found that heart-attack risk decreases 10 percent when the clocks go back.

Some long-term weather forecasters believe this could be the coldest winter Britain has faced in over half a century – with snowstorms and Arctic winds set to bash our shores. Sniffling noses and indoor activities will be the order of the day.

However, here at FundCalibre we’ve had a look at some of the top holdings in our Elite Rated funds that we feel are ready to take advantage as the cold, dark nights set in.

Indoor entertainment: Netflix

Almost half of all UK homes now take one of the major subscription streaming services, with Netflix leading the charge, according to Ofcom**. Netflix unveiled a 26% increase in subscriber gains in the first quarter of 2019, totalling 11.5million. The standard tariff is now £8.99 a month, allowing you to stream a treasure trove of TV programmes and movies for people of all ages on two devices at the same time. Existing holders of the stock include the likes of the Scottish Mortgage Investment Trust (2.4%***) and the T. Rowe Price Global Focused Growth Equity fund (2.1%***).

Off to the flicks: Cineworld

Going to the movies is an easy solution for family entertainment in the winter. Cineworld Group is the second largest cinema chain in the world with almost 10,000 screens in 10 countries. It is also a top 10 holding*** in the Elite Rated Marlborough Multi Cap Income fund, managed by Siddarth Chand Lall. He said in FundCalibre’s Investing on the Go podcast recently: “Cineworld is profitable and it’s continued to de-gear. It’s recently done a sale and leased back of some of its cinemas in America, which means it’s released several hundred million in cash and, surprise, surprise it’s also paid a special dividend to announce that. It’s also a quarterly dividend payer which is great.”

Cough, colds and flus: AstraZeneca

Cough and colds are commonplace as winter sets in and many more of us trundle our way to the pharmacist looking for a quick fix. Celebrating its 20th birthday this year, AstraZeneca is now one of the leading pharmaceutical firms in the world. The firm is currently in the midst of having its nasal spray distributed to GP surgeries and schools across the UK. The nasal flu vaccine is being offered to all primary school pupils in England, all children aged two and three, as well as anyone up to the age of 17 with an underlying illness. The stock is a popular holding in the likes of Threadneedle UK Equity Income fund (9.3%***) and Merian UK Alpha (3.8%***).

Get the shopping delivered: Ocado

Ocado is a good example of the move to online shopping across the globe. Launched in 2000, the company floated on the London Stock Exchange less than a decade ago and is now a member of the FTSE 100. In contrast to its main competitors, the company has no chain of stores and does all home deliveries from its warehouses. The firm announced revenues of £1.6 billion in 2018. It is also the top holding in the Baillie Gifford Global Discovery fund, with a 4.9%*** holding. The fund is managed by Douglas Brodie and invests in 75-150 stocks with very high growth prospects globally.

More family fun: Ten Entertainment

Bowling is another easy win as an indoor family activity. Ten Entertainment Group is the second largest tenpin bowling operator in the UK with 45 sites and approximately 1,000 bowling lanes. It also has a number of amusement machines, table tennis and pool tables. The stock is currently a top 10 holding*** in the LF Gresham House UK Micro Cap fund. Speaking about the stock in April, manager Ken Wotton said “Ten Entertainment has the potential to deliver industry-leading financial metrics and currently offers a prospective yield of 4.5%. Through continued capital investment and measured site expansion, the company also offers compelling profit and dividend growth potential.”

*Source: National Geographic, 2012 study by Martin Young at Birmingham’s University of Alabama
**Source: Ofgem, 7 August 2019
***Source: fund factsheets, 30 September 2019

The views of the author and any people interviewed are their own and do not constitute financial advice. However the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Before you make any investment decision make sure you’re comfortable and fully understand the risks. If you invest in fund or trust make sure you know what specific risks they’re exposed to. Past performance is not a reliable guide to future returns. Remember all investments can fall in value as well as rise, so you could make a loss.