Tip of the month

My tip this month is Wm Morrison, the supermarket group, for five reasons. Morrison offers a safe haven as people need to eat and the stock is a defensive investment. The group is pushing ahead at a quicker rate than its rivals. In the latest first half, Morrison recorded a dramatic 46 per cent jump in pre-tax profit from £309m to £449m.

Sales rose five per cent to £7.5bn, fuelled by growing demand for its
fresh-foods range. Investment banking group Merrill Lynch is looking for sales growth of 4.5 per cent in the second half-year as food price inflation bites.

Morrison, which has pulled in a million new shoppers over the past two years, will pass on lower food prices to customers despite the rises in costs. After seeing a 50 per cent leap in sales from former Somerfield and Co-op outlets, the group is now considering a big roll-out of smaller stores. Buy Wm Morrison at the current price and with a 20 per cent stop/loss trigger to protect you against major market falls.

Stockmarket and alternative investments can fall as well as rise in value. Readers should consult their own professional advisers.