DGE, GSK, BAT: Should you choose manufacturing stocks for investment?

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DGE, GSK, BAT: Should you choose manufacturing stocks for investment?

 DGE, GSK, BAT: Should you choose manufacturing stocks for investment?
Image source: Gorodenkoff, Shutterstock.com

Highlights

  • Manufacturers across the UK increased their selling prices at a record high rate in the month of April, as per S&P Global.
  • Standing at a 13-month low of 55.2 in March, the value of the S&P Global/CIPS manufacturing Purchasing Managers' Index went up last month to 55.8.

The UK inflation levels have been soaring as the cost of materials and labour have been hitting the roof. According to the results of a new survey carried out by S&P Global, manufacturers across the UK increased their selling prices at a record high rate in the month of April. Not even 1% of the UK manufacturing firms declined their prices, while 61% of the firms lifted their prices.

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Reportedly, the prices of consumer goods went up by record levels with approximately 85% of the businesses recording a hike in purchase prices. However, there were no cases of price falls. According to Rob Dobson, Director of S&P Global, the inflationary situation in the UK is getting worse day by day. The factory gate selling prices have been ballooning due to the escalating cost of inputs, which have now hit the second-highest level in the 30-year history of the survey.

Standing at a 13-month low of 55.2 in March, the value of the S&P Global/CIPS manufacturing Purchasing Managers' Index went up last month to 55.8. Even though the factory activity did increase in April after facing a blow recently due to the escalation of the Russia-Ukraine crisis, the manufacturers are still cautious about the future.

 

Due to the rising geopolitical concerns accompanied by lockdowns in China, manufacturers worldwide are getting impacted owing to disruption of the global supply chains. In the UK, optimism among businesses has been going down due to additional concerns related to Brexit.

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Let’s look at 3 UK manufacturing stocks that investors can keep an eye on amid the soaring inflation.

British American Tobacco plc (LON: BATS)

The shares of the UK-based cigarette manufacturing business were up by 0.05% as the market opened at 8:37 AM (GMT+1) on 4 May 2022, at GBX 3,351.00. The company, which is a constituent of the FTSE 100 index, has given its shareholders a return of 24.93% over the last one year as of 4 May 2022. The company’s current market cap stands at £76,288.52 million.

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                               Image description- UK manufacturers facing increasing costs

Diageo plc (LON: DGE)

The shares of the beverage alcohol firm were down by 0.53% at around 8:41 AM (GMT+1) on 4 May 2022, at GBX 3,979.00. The company, which is a constituent of the FTSE 100 index, has given its shareholders a return of 22.47% over the last one year as of 4 May 2022. The company’s current market cap stands at £92,436.13 million.

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GlaxoSmithKline plc (LON: GSK)

The shares of the British pharma group were down by 0.74% at around 8:43 AM (GMT+1) on 4 May 2022, at GBX 1,782.20. The company, which is a constituent of the FTSE 100 index, has given its shareholders a return of 33.05% over the last one year as of 4 May 2022. The company’s current market cap stands at £91,357.65 million.

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