A dozen ideas for your ISA or SIPP

Want to get more active in the stock market but lack investment ideas? AJ Bell-owned SHARES magazine has selected 12 shares that it believes to have the right ingredients to prosper in 2016.
SHARES editor Daniel Coatsworth now summarises the investment case for each share. They cover a range of industry sectors and different size companies, so hopefully there will be plenty of shares that suit your appetite for risk. Remember that you should always undertake your own research before buying any investments.

Aggreko (LSE:AGK)

One of Britain’s few truly world class businesses, Aggreko is the only global scale provider of temporary power equipment to domestic utilities, multinationals and governments, boasting a 40% market share.

Consistently strong cash generation, a rock solid balance sheet and a dominant position in a vibrant market are compelling reasons to own the stock.

BCA Marketplace (LSE:BCA)

New directors, fresh ideas, reduced debt and big growth opportunities are all reasons to consider car auctions giant BCA Marketplace. Having cracked the UK market, it now hopes to replicate this success in Europe.
The group, whose operations include website webuyanycar.com, has put the wheels in motion to expand its service offering. For example, a logistics business was acquired in August which adds a new revenue stream to the group from the delivery of new vehicles across the UK.

Bellway (LSE:BWY)

Runaway demand chasing scarce supply remains very much the order of the day in the UK housing market. While some builders seem more concerned with managing margins than raising volumes to deal with an incipient housing crisis, Bellway is one of the companies bucking that trend.

Labour and raw material costs are going up across the building sector, putting pressure on profit margins. Bellway hopes to protect its earnings by increasing output.

BP (LSE:BP.)

This is a high-risk trade given current oil price weakness; yet oil major BP is more advanced than most of its peer group in adapting to the lower commodity price environment.

It has streamlined operations and some fund managers believe it could be a takeover target in 2016.

Breedon (LSE:BREE)

Breedon is the largest independent aggregates business in the UK after the global majors. It operates 53 quarries, 26 asphalt plants, 59 ready-mixed concrete plants and three concrete block plants in England and Scotland.
It offers an attractive mix of quality management and scope to make acquisitions as international cement players demerge non-cement assets. We believe the construction markets will look in better health during 2016.

Dalata Hotel (LSE:DAL)

Irish hotel group Dalata Hotel is forecast by analysts to produce double-digit profit growth over the next three years as it benefits from the robust economy in Ireland and a string of earnings-enhancing acquisitions made over the past few years.
Dalata has 77% of its 6,700 rooms in Ireland and a 9% market share. The country’s gross domestic product (GDP) grew by 1.9% in the second quarter of 2015, the sixth consecutive quarter of growth, leaving it on track to be the fastest growing economy in Europe in the past year. These factors are helping to drive up hotel room prices.

Eagle Eye Solutions (LSE:EYE)

Eagle Eye is a great play on the online shopping boom. It has a patent-protected, multi-channel promotions platform that helps retailers, restaurants and betting shops offer customers rewards, promotions and freebies designed to get business through their virtual doors. This seeds loyalty that keeps customers coming back for more.
Research shows that loyal consumers are worth up to 10 times as much as their first purchase. Rewarding and incentivising consumers with digital promotions, coupons and discounts is the key to increasing sales and brand loyalty. Market forecasts estimate that more than one billion consumers worldwide will be redeeming digital vouchers by 2019.

Greencore (LSE:GNC)

Growth in convenience store numbers and booming UK employment, the latter driving an increase in the number of workers purchasing sandwiches, sushi or salads on lunch breaks, are supportive factors for convenience food manufacturer Greencore.
Exposure to the structurally-growing food-to-go segment means Greencore’s earnings have a resilient bent. Analysts forecast an imminent return to profit in the US.

Prudential (LSE:PRU)

Asian consumers are at a tipping point when they have sufficient income to start using the range of financial services to help manage their money and protect their wealth and themselves. HSBC is exploiting this trend with banking services; Prudential is doing the same with insurance.

We prefer Prudential as a way to play this trend as it is a stronger business with a rich stream of cash generation. In contrast, HSBC continues to battle reputational issues surrounding fines and scandals.

Serco (LSE:SRP)

Outsourcer Serco is aiming for a New Year detox in 2016 as its new strategy starts to take shape. A hangover following failings on a prisoner tagging contract and over-reliance on a handful of profitable contracts saw the stock in 2015 trade at its lowest price for more than a decade.

Now leaner and fitter thanks to a new strategy and a cleaned up balance sheet, Serco may be about to regain its form. Government contracts in justice and immigration, defence, transport, citizen services and healthcare will be a key focus. 

Shawbrook (LSE:SHAW)

Market conditions are extremely favourable for Shawbrook as a specialist lender to small businesses. The Government is eager to help young enterprises and is encouraging banks to provide finance to aid growth. The UK economy is robust and unemployment is at a near 10-year low. All these factors will help drive confidence in small businesses and encourage them to seek the means by which to expand.
The Brentwood-based group was established in 2011 to fill the void left by the mainstream banks after they had stopped lending to most small businesses as the global financial crisis took hold. Shawbrook specialises in providing consumer loans, mortgages and business funding such as asset financing, a form of secured lending.

Telecom Plus (LSE:TEP)

Top-quality execution and great visibility; multi-utility Telecom Plus has both in abundance. The FTSE 250 stock has had its struggles, such as the shock £11 million bad debt hole discovered in April 2015. But the company has also shown its ability to bounce back quickly, as we argued at the time. 
The past 12 to 18 months have been fairly tough; the big six power suppliers have been seeding new customer acquisitions with hefty discounts. That’s something Telecom Plus simply won’t follow and one that seems an unsustainable model. The big six’s reputations are in the mud and customers are increasingly turning to independents, of which Telecom Plus is the UK’s biggest player.