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Bloxham unveils top half dozen stock tips for 2010

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Bloxham, the Dublin-based fund manager, has named six top rated firms the company believes are poised to outperform in 2010.

The company, which has now reduced its cash holding from an earlier year high of 18 per cent to eight per cent, has also re-balanced its geographical breakdown in the Elite Bloxham Global Equity Income Fund.

According to Bloxham, the six best stocks for 2010 are:

1. Nestle – global brand with everyday consumables; demand for its products remains good, particularly given its strong emerging markets exposure. Balance sheet remains strong also, particularly with potential sale of its stake in leading global eyecare business Alcon to Novartis.
2. Bayer – global company with strong emerging markets exposure; comprises a range of businesses well placed in areas of pharmaceutical, diagnostics, animal health products and crop protection.
3. Nokia – the world’s leading mobile handset manufacturer; although suffering from worries about margin pressure, currently trading with a dividend yield of close to five per cent and a sub-market price earning ratio of 12 ; the company has a history of recovering from such setbacks and re-attaining premium valuations.
4. Home Depot – US DIY/home improvement retailer; one of Bloxham’s less cyclical cyclicals which should benefit from the current signs that US housing is bottoming out.
5. Total Produce – midcap Irish company that is Europe’s leading distributor of fruit and vegetables with EUR2.25bn in annual sales; it trades at a very low valuation of five per cent of sales and a free cash-flow yield of 30 per cent.
6. Hutchinson Whampoa – Hong Kong diversified company with substantial exposure to China through ports, telecoms, property, retail and hotels; China continues to be a major success story and the Bloxham house view is that this will be a major company on the global stage in 2010.

The Elite Bloxham Global Equity Income Fund is now weighted 31 per cent US, 15 per cent UK, 13 per cent France, 11.5 per cent Asia and Japan, six per cent Germany, five per cent Switzerland, 9.5 per cent other and nine per cent cash.

Bloxham’s Pramit Ghose says: “Since we unveiled the fund back in April 2008, global markets have been up and down like a yo-yo, but despite the extremely volatile conditions we have grown the fund’s dividend stream by around 5.5 per cent in the past year, making it a sound bet for any income investor’s portfolio.

“We are continuing to increase our cyclical exposure carefully while correspondingly increasing our exposure to blue chip stocks, some of which are trading at or close to 20 year valuation lows.”

Just last week Ghose increased the fund’s cash position to eight per cent by selling his holdings in Swire Pacific, Deutsche Boerse and top slicing stocks like Microsoft that had performed well recently.

A recent purchase has been the Irish buildings materials group CRH. It is one of the largest buildings materials group in the world and derives over 90 per cent of its revenue outside of Ireland.

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