Can these 5 shares make gains next year? Aviva plc, Petrofac Limited, Tullow Oil plc, Tesco PLC and British American Tobacco plc

Is now the right time for me to buy Aviva plc (LON:AV) (AV.L), Petrofac Limited (LON:PFC) (PFC.L), Tullow Oil plc (LON:TLW) (TLW.L), Tesco PLC (LON:TSCO) (TSCO.L) and British American Tobacco plc (LON:BATS) (BATS.L)

Aviva plc
Aviva plc

While the FTSE 100 continues to edge higher, I’m still looking for stocks to buy and that’s why I’m considering Aviva plc (LON:AV) (AV.L), Petrofac Limited (LON:PFC) (PFC.L), Tullow Oil plc (LON:TLW) (TLW.L), Tesco PLC (LON:TSCO) (TSCO.L) and British American Tobacco plc (LON:BATS) (BATS.L).

In my view, Aviva has upside potential. The company has been able to deliver a successful restructuring and reorganisation in the last few years that has positioned it for further growth. The company has a 5%+ dividend yield and this may appeal during a period of higher inflation. With a P/E of less than 10, Aviva seems to offer good value for money while the FTSE 100 is close to an all-time high.

Petrofac is a stock I’ve been watching for some time. The company is in a period of uncertainty both from the oil price volatility being experienced, as well as the SFO investigation taking place. In my view, this makes its risk to reward ratio relatively unfavourable at a time when a number of oil and gas stocks are on my radar. Therefore, Petrofac may be worth adding to my ISA further down the line, but not at the moment.

Tullow Oil on the other hand seems to have investment appeal just now. The company is in the process of delivering on its new strategy. That is to reduce debt through increased production. So far, the company’s TEN field has helped to boost production, and this trend could continue. This could alleviate further the debt challenges the company has faced in terms of improving investor sentiment. Therefore, Tullow Oil appears to have investment potential in my view.

Tesco’s deal to buy Booker could transform the company’s overall performance in my opinion. The company has been able to successfully pivot towards the UK, and this seems to have given it greater focus on key areas such as efficiency. Sales figures have also improved in recent months, while the prospect of margin expansion could help support a higher share price. While it faces uncertain trading conditions, Tesco’s strategy may provide it with a bright future.

British American Tobacco is one of my top picks in the FTSE 100 at the moment. I like the stability the company appears to offer from its dominant position within the tobacco industry. This was strengthened with the acquisition of the remainder of Reynolds which it did not own. As well as this, British American Tobacco could benefit from further investment in reduced risk products. This could catalyse its EPS growth and make it a sound addition to my ISA for the long run.

About Robert Stephens 3883 Articles
Robert Stephens is a CFA Charterholder and an Equity Analyst by trade. He is a passionate private investor who has been buying and selling shares for many years, owning a wide range of UK shares in the process. He has written for Citywire and The Motley Fool US and now runs his own business. To contact Robert, please email [email protected] or use one of the other contact methods available on the 'Contact Us' page