The stock in question is Reckitt Benckiser.
Moore commented of the stock that, ‘Consumer goods business Reckitt Benckiser was another new holding: the free cashflow yield of 5 per cent appeared attractive, given the company’s strong earnings and dividend growth potential. Its recent acquisition of Mead Johnson has the potential to deliver significant earnings accretion and boost earnings growth in the years ahead. In addition, Reckitt Benckiser management has the ability to improve operational execution at Mead Johnson, particularly in China and the US. We expect acceleration in organic growth in other divisions too, particularly in the healthcare sector where there are many growth opportunities.’
The fund manager added that he has also been buying shares in the property company Countryside.
He remarked, ‘We purchased a new holding in housebuilding firm Countryside. Management is indicating good sales growth into 2018. The company is also expanding its existing land bank and increasing its exposure to mixed tenure housing, which aligns it with government housing policy.’
Moore concluded his comments with a look at some of the shares he has been selling. He commented, ‘We also sold some stocks, reducing our holding in Imperial Brands. The company recently issued a disappointing statement that indicated challenges in maintaining revenue growth, particularly in the US where the brands the company has acquired may require further investment. We took some profits in mining company Rio Tinto, as the sharp increase in iron ore inventories could now constrain the iron ore price, undermining the cashflow and dividend attractions of the stock.’
The Standard Life UK Equity Income Unconstrained fund has returned 108 per cent over the past five years, compared with 78 per cent for the average fund in the IA UK Equity Income sector in the same time period.