Is Shell plc (SHEL) The Best UK Stock to Buy According to Billionaires?
We recently published a list of . In this article, we are going to take a look at where Shell plc (NYSE:SHEL) stands against other best UK stocks to invest in.
Like most of the world, the United Kingdom is also facing slower economic growth in 2025, fuelled by an unpredictable trading environment and high taxes. According to KPMG, there are some upsides to the UK economy this year, including solid household savings and robust public spending. However, American tariffs could limit UK GDP growth to only 0.8% during 2025 and 2026. In the short term, inflation will likely come back due to growing labor costs and skyrocketing energy prices. Nonetheless, KPMG forecasts that inflation will simmer down to the Bank of England's target of 2% by the middle of next year.
What came as a surprise was the UK economy going up by 0.1% in Q4 2024, a welcome reprieve from the sodden economic outlook painted by market experts. This made Britain the top performer in Europe during the fourth quarter, as Italy remained flat and German and French economies shrunk. However, the UK economy fell short of the 0.6% growth in the United States. In light of these economic developments, Scott Gardner, investment strategist at JP Morgan-owned wealth manager Nutmeg, told Reuters on February 13, 2025:
"A pleasant surprise, but we're not out of the woods yet. Beneath the surface of these latest figures, domestic demand via consumption and business investment was weaker than expected,"
As per Britain's Office for National Statistics, wholesalers, film distributors, pubs and bars, industrial manufacturers, and pharma led the growth in December 2024. However, it should be noted that this growth was dependent on monetary support from the government and a brief pile-up in business inventories. In addition, flat spending trends were observed in households, and business investment stumbled by 3.2% in Q4. The Bank of England has now slashed its growth outlook for 2025 to 0.75%, while the National Institute of Economic and Social Research remains optimistic with a 1.5% forecast.
Investor optimism is increasing around the UK, given the rising trade tensions between the United States and Europe. While UK economic growth has lagged in recent years, BofA analysts expect it to pick up pace in 2025, projecting 1.4% growth. Analysts see positive signs like deregulation, capital spending, and potential US trade benefits. Sanjay Raja, chief UK economist at Deutsche Bank, told CNBC on March 24, 2025:
'Talk of a U.S. trade deal also surfaced in client conversations, and there was increased optimism that the U.K. may be spared from direct and widespread tariffs,'
It is interesting to note that no matter the macroeconomic conditions, the rich seem to be getting richer.
A gas refinery lit up against the night sky, showing the scale of the company's petrochemical operations.
To collect data for this article, we scanned Insider Monkey's database of billionaires' stock holdings and identified the companies headquartered in the UK but listed on American exchanges. From there, we picked the top 10 companies with the highest number of billionaire investors in Q4 2024. The stocks are ranked in ascending order based on the number of billionaire investors. We have also mentioned the value of billionaire holdings for further insight.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points ().
Number of Billionaire Investors: 14
Value of Billionaire Holdings: $2.63 billion
Shell plc (NYSE:SHEL), a London-based oil and gas titan, is one of the best UK stocks to buy. On March 26, Piper Sandler assigned an Overweight rating on the stock with a price target of $72. Over the last two years, Shell has saved almost $3 billion in costs, and it plans to cut down on $2-4 billion more. Analysts at Piper Sandler observed that Shell is focusing on making money and using it to repurchase shares, which can help grow earnings for each shareholder. They expect Shell's cash flow per share to grow by 10% each year until 2030.
In Q4 2024, Shell raised its dividend by 4% and launched a $3.5 billion share repurchase plan, continuing a trend of at least $3 billion in buybacks for the 13th consecutive quarter. The company raked in $40 billion in free cash flow, higher than 2023, despite lower energy prices.
On April 1, Shell plc (NYSE:SHEL) completed its acquisition of Pavilion Energy. This move strengthens its global position in liquefied natural gas. Pavilion is based in Singapore and adds roughly 6.5 million tonnes per year of contracted LNG supply to Shell's portfolio, as well as important infrastructure like regasification capacity and a bunkering business. The acquisition aligns with Shell's strategy to grow LNG sales by 4-5% per year through 2030.
Shell plc (NYSE:SHEL) was part of 14 billionaire portfolios at the end of Q4 2024.
Overall, SHEL ranks 1st among the best UK stocks to buy according to billionaires. While we acknowledge the potential of UK stocks, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than SHEL but that trades at less than 5 times its earnings, check out our report about this .
READ NEXT: and .
Disclosure: None. This article is originally published at Insider Monkey.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
16 minutes ago
- Yahoo
Returns On Capital At Cadence Design Systems (NASDAQ:CDNS) Have Stalled
To find a multi-bagger stock, what are the underlying trends we should look for in a business? Typically, we'll want to notice a trend of growing return on capital employed (ROCE) and alongside that, an expanding base of capital employed. If you see this, it typically means it's a company with a great business model and plenty of profitable reinvestment opportunities. That's why when we briefly looked at Cadence Design Systems' (NASDAQ:CDNS) ROCE trend, we were pretty happy with what we saw. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. For those that aren't sure what ROCE is, it measures the amount of pre-tax profits a company can generate from the capital employed in its business. Analysts use this formula to calculate it for Cadence Design Systems: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.19 = US$1.5b ÷ (US$9.0b - US$1.3b) (Based on the trailing twelve months to March 2025). Thus, Cadence Design Systems has an ROCE of 19%. In absolute terms, that's a satisfactory return, but compared to the Software industry average of 9.5% it's much better. Check out our latest analysis for Cadence Design Systems Above you can see how the current ROCE for Cadence Design Systems compares to its prior returns on capital, but there's only so much you can tell from the past. If you'd like to see what analysts are forecasting going forward, you should check out our free analyst report for Cadence Design Systems . While the returns on capital are good, they haven't moved much. The company has employed 180% more capital in the last five years, and the returns on that capital have remained stable at 19%. Since 19% is a moderate ROCE though, it's good to see a business can continue to reinvest at these decent rates of return. Over long periods of time, returns like these might not be too exciting, but with consistency they can pay off in terms of share price returns. On a side note, Cadence Design Systems has done well to reduce current liabilities to 14% of total assets over the last five years. This can eliminate some of the risks inherent in the operations because the business has less outstanding obligations to their suppliers and or short-term creditors than they did previously. In the end, Cadence Design Systems has proven its ability to adequately reinvest capital at good rates of return. On top of that, the stock has rewarded shareholders with a remarkable 215% return to those who've held over the last five years. So even though the stock might be more "expensive" than it was before, we think the strong fundamentals warrant this stock for further research. Cadence Design Systems could be trading at an attractive price in other respects, so you might find our on our platform quite valuable. If you want to search for solid companies with great earnings, check out this free list of companies with good balance sheets and impressive returns on equity. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
NBC Sports
16 minutes ago
- NBC Sports
Former Washington minority owner Fred Smith dies at 80
Fred Smith, a towering figure in American business, has died. He was 80. While in most contexts he will be remembered first and foremost as the founder of FedEx, Smith had a significant impact on the NFL. He was the father of former Falcons coach and current Steelers offensive coordinator Arthur Smith. Fred Smith also was a long-time minority owner of the Washington Commanders, and FedEx for many years held the naming rights to the stadium where the team plays. Beyond his company expressly requesting that the team abandon its former nickname in July 2020, Smith's efforts to extricate himself from the team placed significant pressure on former principal owner Daniel Snyder. Along with Robert Rothman and Dwight Schar, Smith worked to find a way out of their partnership with Snyder, culminating in Snyder buying their stakes in the franchise in early 2021. The unrest sparked by Smith and the other minority partners contributed to the focus on the business activities of the franchise as led by Snyder. There is an unmistakable link between the Smith/Rothman/Schar situation and the ultimate ouster of Snyder in 2023. Smith first acquired his interest in the team in 2003. He had attempted to secure an expansion franchise in Memphis in the 1990s, when the Panthers and Jaguars joined the NFL. With Elvis Presley's estate involved in the bid, the team would have been known as the Memphis Hound Dogs.
Yahoo
an hour ago
- Yahoo
The Return Trends At Newmont (NYSE:NEM) Look Promising
If you're looking for a multi-bagger, there's a few things to keep an eye out for. In a perfect world, we'd like to see a company investing more capital into its business and ideally the returns earned from that capital are also increasing. Basically this means that a company has profitable initiatives that it can continue to reinvest in, which is a trait of a compounding machine. With that in mind, we've noticed some promising trends at Newmont (NYSE:NEM) so let's look a bit deeper. We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. Just to clarify if you're unsure, ROCE is a metric for evaluating how much pre-tax income (in percentage terms) a company earns on the capital invested in its business. To calculate this metric for Newmont, this is the formula: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.14 = US$7.0b ÷ (US$56b - US$5.4b) (Based on the trailing twelve months to March 2025). So, Newmont has an ROCE of 14%. In absolute terms, that's a satisfactory return, but compared to the Metals and Mining industry average of 9.8% it's much better. View our latest analysis for Newmont Above you can see how the current ROCE for Newmont compares to its prior returns on capital, but there's only so much you can tell from the past. If you'd like, you can check out the forecasts from the analysts covering Newmont for free. Investors would be pleased with what's happening at Newmont. Over the last five years, returns on capital employed have risen substantially to 14%. The amount of capital employed has increased too, by 33%. So we're very much inspired by what we're seeing at Newmont thanks to its ability to profitably reinvest capital. A company that is growing its returns on capital and can consistently reinvest in itself is a highly sought after trait, and that's what Newmont has. Investors may not be impressed by the favorable underlying trends yet because over the last five years the stock has only returned 15% to shareholders. So exploring more about this stock could uncover a good opportunity, if the valuation and other metrics stack up. If you'd like to know more about Newmont, we've spotted 2 warning signs, and 1 of them makes us a bit uncomfortable. While Newmont may not currently earn the highest returns, we've compiled a list of companies that currently earn more than 25% return on equity. Check out this free list here. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
