Nick Lockwood, director at Capital, the financial PR investor relations consultancy which acts for WILink, says: “The survey reflects the positive attitude to the economy as a whole, as well as private investors’ familiarity with larger names - and certainly the big consumer brands.”
And Lockwood says the survey shows how critical media coverage is to investor sentiment. “Press coverage matters. Would Morrisons have been where it is in the survey if it wasn’t for the supermarket struggle?”
But not all publicity is good publicity, as can be seen by what Lockwood calls the “shocking” position of Sainsbury’s result and by the fact Somerfield came in at number 27 on the WILink ranking.
In the kingdom of food and drink, the number one brand is king. Well it is as far as the private investor is concerned, according to a unique survey carried out exclusively for The Grocer. We wanted to find out which UK supermarket groups and food and drink companies were bringing out the rampaging bulls in the private investor community and which were sending the cautious bears into hibernation.
So we asked WILink, the global investor relations and investment information service, to survey its database of more than 9,000 private investors who had placed orders for annual reports from companies in the food and beverages sector over the past 12 months.
The investors were asked how they rated the 70 food and drink manufacturers listed on the London and AIM Stock Exchanges as prospective future investments.
For every bullish vote, WILink awarded two points, for every neutral vote it awarded one point and for every bearish vote, one point was deducted. No points were awarded for don’t knows or don’t cares.
The results (right), ranked according to total scores, provide a fascinating insight into which stocks private investors think are hot and which are not in the UK food and drink market. And the message could not be clearer: the bigger a company is the more bullish investors are about it.
Top of the stocks is global giant Unilever. Private investors are clearly impressed by the company’s huge cashflow and the expectation of a high dividend as well as share buybacks. They also like the prospect of the company’s ice cream division producing global growth next year.
But snapping at its heels is Tesco, which scores highest of the retailers, its dominance over its rivals showing that it is not only the analysts that are excited by its aggressive international expansion and successful EDLP strategy.
Interestingly, the explosion of media interest in Morrisons as a result of the Safeway saga is also creating interest among
investors, as the possibility of it taking over the troubled number four chain becomes more of a likelihood.
Sainsbury may well be able to better its position next year if the new chief executive can win back the confidence of the investment community. Safeway, on the other hand, is slipping down the investor agenda as the prospect of it disappearing from the UK food retailing stage increases and this is clearly reflected in its ranking.
Drinks manufacturers fare particularly well in the rankings, which is not too surprising given that the likes of Allied Domecq, Scottish & Newcastle and Diageo are global and pride themselves on their innovative strategies. But brewer Young’s position is striking, says Lockwood. “Is this the vocal chairman, their beer, or a belief in the property portfolio even though the family controls all the voting shares?”
Robert Wiseman’s strong showing is also interesting. Investors are clearly impressed by the fact Wiseman is more dynamic and flexible than its bigger rivals.