Page 26 - DIY Investor Magazine | Issue 37

Apr 2023 26 DIY Investor Magazine · SG: Well, the UK market is very lowly priced, and quite diverse; many companies are trading well below the average valuation, so it’s a great stock-picking environment, and we’re finding opportunities across a whole raft of sectors. It’s hard to say which is the most interesting. Some areas that performed well last year – like energy, like banks – look pretty resilient. We’re pretty optimistic about the outlook for energy and banking sectors, but also more domestic orientated areas. The building construction area has lots of shares that are quite depressed; the economic outlook is more difficult, the housing market’s under pressure, but companies are pricing in a lot of bad news, and on a three-to-four-year view, that looks really interesting in terms of good value today. There are also opportunities in more defensive areas, utilities, pharmaceuticals, where profits should be more resilient. I would say there are opportunities across the market in different sectors. It’s much more about individual stocks, and individual opportunities, and that’s great for a stock picker - we can see value across a range of sectors in different companies, JC: As ever, Simon, it’s about getting under the skin of the business and understanding where the real value might be. SG: Yeah, absolutely. We are stock pickers, fundamentally. It’s much more important to us that we find a good company with an attractive valuation and supportive end market dynamics, than if we try and predict where the macroeconomic outlook is going to go. That’s incredibly difficult to predict, and also very hard to work out how that’s going to affect share prices as well. JC: Well, sadly, Simon, we’re out of time, but it’s always a pleasure. Thank you very much indeed for that update and for your thoughts. SG: Thank you. JC: And thank you for listening to A Value View from The Merchants Trust. You can find out more about The Merchants Trust and read and watch Simon’s latest investor notes by going to merchantstrust.co.uk. Thanks again for listening, and until next time, from all of us here at The Merchants Trust, it’s goodbye. Find out more about The Merchants Trust here > by going to merchantstrust.co.uk.