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The unglamorous seven has soared 1,000 per cent over 20 years

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Ok, now back to business.

While the US has the “Magnificent Seven” which has drawn a huge amount of investor interest and coverage over the past year, the UK has something similar to offer – the “Unglamorous Seven”.

Unlike the US, which has experienced extraordinary stock market growth over the last decade, the UK stock market’s returns have been more modest. Moreover, its winners during this period have been rather unusually, consisting largely of non-growth names such as Compass, Intertek, Relx, Experian, Diploma, Bunzl and Howdens.

For instance, Bunzl distributes paper towels along with thousands of other products, from disposable cups to detergents. Howdens manufactures fitted kitchens, appliances and other joinery products. These are less glamorous, yet successful businesses that have outpaced the rest of the market.

One of the reasons behind this extraordinary performance is size. These companies, although reasonably robust and sustainable, are a lot small than larger cap stocks in the FTSE 100. They are also at an earlier stage of their business cycle which means they have a longer runway for future growth. Nevertheless, these aren’t small companies and many of them are now in the FTSE 100. It just goes to show that sometimes boring can be profitable.

Source: Financial Times

Coming up:

• Dubai got more than a year’s worth of rain

• Savings accumulated during the pandemic are now declining

• The IMF is concerned about large fiscal deficits in the US and China

• US workers age 55 and older have left the labour force in large numbers

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