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Questor Stock Pick History Suggests Long-term Prospects Remain Bullish

Strategic Insights

— 1 min read

Despite several bear markets temporarily interrupting its progress, the FTSE 100 has consistently posted new all-time highs, resulting in a high single-digit annualised total return for investors who have stuck with it. At its inception in 1984, the index stood at 1,000 points, and it has since risen to over 9,000 points. Questor's inherent optimism has also proven highly beneficial, as evidenced by its "buy" tip for InterContinental Hotels Group (IHG) during the early part of the pandemic in March 2020.

Key Takeaways:

  • The FTSE 100 has consistently posted new all-time highs, resulting in a high single-digit annualised total return for investors who have stuck with it.
  • Since its inception in 1984, the index has risen from 1,000 points to over 9,000 points, with dividends included.
  • Questor's optimism has proven beneficial, as seen in its "buy" tip for InterContinental Hotels Group (IHG) during the pandemic, resulting in a significant increase in share value.
  • IHG's pipeline of new rooms has increased by 4% since the start of the year and now stands at 338,000, indicating significant growth potential.
  • The company's solid financial position, rising profit margins, and significant pipeline of new rooms make it an attractive investment opportunity.
  • Investors with a long time horizon should be bullish about the stock market's prospects, as the opportunity cost of missing out on its long-term gains is significant.
  • IHG's financial position indicates it has the means to reinvest heavily in growth, with operating profit able to service interest on borrowings nearly seven times during the six-month period.

Statistics:

  • FTSE 100 rose from 1,000 points at inception in 1984 to over 9,000 points.
  • Annualized total return for FTSE 100 investors: high single-digit percentage.
  • IHG's pipeline of new rooms increased by 4% since the start of the year and now stands at 338,000.
  • Net debt at IHG rose by 21% year-on-year to $3.4 billion.
  • IHG's operating profit was able to service interest on borrowings nearly seven times during the six-month period.
  • IHG's share price currently stands at £88.60.
  • Questor's earnings multiple for IHG is 27.7.
  • IHG expects annualized earnings growth of 12-15% over the long run.

Sources:

  • ROBERT STEPHENS QUESTOR STOCK PICK HISTORY

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