IL&P named as pick for 2010

IRISH Life & Permanent has been named one of the share picks of 2010 by a number of Irish brokers.

The group is set play a pivotal role in the formation of a new third force in the Irish banking sector with its mortgage business expected to merge with EBS/Irish Nationwide to form the new bank.

That will free Irish Life to concentrate on what Davy Research sees as a still dynamic sector of pensions and life assurance.

If the new bank emerges that will be “positive catalyst for valuation levels as the focus shifts to amarket-leading life company in a country with favourable demographics”, the broker said.

In its stock picks for 2010 Dolmen Stockbrokers has also nominated IL&P as a share likely to do well in the current year.

Both have also chosen the global building materials group CRH as a group destined to boost earnings as the world economy gains traction.

CRH is the most exposed to the US infrastructure market and is due to benefit from the second stimulus package put in place by the Federal Highway Programme.

It was announced before Christmas that the dominant Irish cement group had been hit with a €25m fine for being part of a price fixing cartel by the Polish authorities.

CRH has denied all such allegations and is to contest the fine, it said.

Significantly also the Kerry Group features in the top 10 picks of 2010 with both brokers citing the “defensive” qualities of the group.

Through the two years of the economic slump Kerry’s share price has held up remarkably well as it retained much of its value.

Davy have been very bullish about Kerry following its much praised “go to market” strategy evolved under chief executive Stan McCarthy.

Two other construction groups Travis Perkins and Heidelberg Cement make the Davy top 10 list as both are set to benefit from the pickup in their markets in the year ahead.

Smurfit Kappa Group has been singled out as a good growth target this year likely to benefit from the discipline displayed by the paper and packaging sector as demand slumped.

Glanbia and C&C feature in the Davy list for 2010 with recent developments in the drinks group, where it now has the number two position in the British cider market giving it a much stronger earnings base.