Six strong UK stocks to buy – MoneyWeek

UKhousebuildinghasperformedpoorlyduetoitsexposuretotheUKconsumer。

Mortgageapprovalsandhousepriceshave,however,beguntostrengthen。

Halifaxshoweda6%increaseinhousepricesbetweenDecember2005andApril2006,andmortgageapprovalsforthefirstquarterof2006wereup29%againstthesameperiodlastyear。

McCarthyStone(MCTY),aspecialisthousebuilder,hasreceivedbidapproachesrumouredtohavevaluedthefirmatmorethantwiceitsassetvalue。

Redrow(RDW),BovisHomes(BVS)andBellway(BWY)areallcurrentlytradingonaround1。

3timestheirassetvalue。

Iexpecttoseea50%riseintheircurrentshareprices。

Ialsolikethereinsurancebroker,BenfieldGroup(BFD)。

ThereinsurancemarketsufferedafterthehurricanesintheUSlastSeptember,andfirmshavebeenrepairingtheirbalancesheets。

Now,increasingdemandforreinsurancecoverwillleadtorisingreinsurancerates。

Benfieldwillbeadirectbeneficiaryofthisand,becauseitonlyactsasabrokerearningcommission,ittakesnounderwritingriskandsowillnotsufferanylossesfromfuturecatastrophes。

Benfield’srobustbalancesheetandstrongcashgenerationwillallowittoreturncashtoshareholders。

Itoffersabove-average,sustainableearningsgrowthatalowrating,withadividendyieldof3。

7%。

SowhathaveIbeensellingtofundthesepurchases?

IboughtAshteadGroup,theUSplant-hirecompany,at80pinOctober2004。

Followingconsistentearningsupgrades,thesharesrecentlyreached235pandIsoldmywholestake。

IboughtUnitedBusinessMediainJanuary2005at460p。

Afterarestructuringofthegroupandsaleofnon-coreassetsbythenewchiefexecutive,thesharesreached750p。

Again,Irecentlysoldallmystock。

ThestocksMileenRashlikes

12mthhigh12mthlowNowHalfords355p267p303pMcCarthyStone908p511p858pRedrow442p380p442pBovisHomes945p588p765pBellway1,286p815p1,048pBenfieldGroup401p253p342p

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