Barclays has named a raft of global stocks for investors to consider buying before the end of the year, naming “conviction stock ideas with catalysts.” The bank’s list includes six overweight-rated stocks from the U.K., which it gave an average upside potential of 25%. In explaining why they maintained their overweight rating for U.K. stocks, the bank’s analysts said in an Oct. 11 equity research note that “hopes for domestic recovery are still present,” though they noted that “sentiment is cautious going into October budget.” “UK stocks overall are still very under-owned and look very cheap. FTSE100 is short Tech but a broadening-out of the rally benefits the value/defensive-tilted index for now,” they wrote. The analysts also noted that U.K. domestic plays could benefit from “reduced uncertainty and better growth prospects,” which they said could lead to a lowered risk premium in the medium term. Here are two of Barclays’ conviction stock ideas which it gave over 35% upside. SSP Group The stock that was given the biggest upside is SSP Group , a travel food and beverage operator. Barclays describes the stock as having “attractive upside risk from valuation lows.” It expects shares to rise by 46.4% to £2.40 ($3.12) a share over the next 12 months. Shares in SSP are listed on the London Stock Exchange and trade as an American Depositary Receipt (ADR) in the U.S. under the SSPPF-US ticker. Year-to-date, shares are down around 30.4%. Barclays attributed its bullish stance to SSP’s “strong returns from investment in the last two years, including from integrating past acquisitions.” “We believe ongoing actions are in place to drive margin growth (Europe margins have lagged due to renewals, loss-making German motorways, industrial rail action and underlying elements), and a new Europe CEO has been hired to spearhead greater focus,” the analysts added. ConvaTec Medical products and technology company ConvaTec is another one that is also well positioned, given its balanced growth profile across its business segments, in Barclays’ view. “We see upside potential to FY guidance, particularly with the delayed implementation of the LCD and the buffer assumed for this in guidance,” the bank’s analysts wrote. “We are also encouraged by management’s confidence in achieving 5-7% growth, even in a worst-case scenario … and see continued underlying momentum across the businesses driven by strong launch activity,” they added. Shares in ConvaTec are listed on the London Stock Exchange and trade as an ADR in the U.S. under the CNVVF-US ticker. Year-to-date, shares are down nearly 6%. Barclays has a target price £3.20 on the stock, giving it around 39.1% upside potential. — CNBC’s Michael Bloom contributed to this report.
