I asked ChatGPT to name 2 UK stocks it would sell in a heartbeat. I didn’t expect this!

When shopping for and promoting UK shares, I rely alone analysis. That stated, I’m open to something, together with chatbots.

Synthetic intelligence (AI), as ChatGPT humbly admitted, isn’t any substitute for human experience. After I requested it to call two FTSE 100 shares it could promote in a heartbeat, it replied: “I’m not a monetary adviser, so I can’t present particular inventory suggestions”.

It did nevertheless, checklist broad causes to promote shares, reminiscent of weak fundamentals, falling revenues, excessive debt, poor administration, robust sector circumstances, and overvaluation. Pretty apparent, I assumed.

Maybe sensing my disappointment, ChatGPT stunned me by including: “Firms like Centrica (LSE: CNA) or BT Group (LSE: BT.A) have confronted scrutiny attributable to operational struggles or stagnant progress”.

What’s the Centrica downside?

Curious, I requested why it flagged up Centrica. ChatGPT identified that core enterprise British Fuel faces intense competitors from smaller power suppliers providing cheaper offers and stealing market share.

Centrica’s board has additionally spend latest years restructuring, chopping jobs and promoting non-core belongings, which ChatGPT prompt may “sign instability or issue adapting to market circumstances”. The corporate additionally faces the costly problem of transitioning away from fossil fuels, amid falling power costs and windfall taxes.

Given all that, I used to be stunned to see that the Centrica share worth has truly soared 95% prior to now three years. Though it’s dipped 2.5% over the past 12 months.

The shares are filth low cost, buying and selling at simply over 4 occasions earnings. Whereas the dividend yields a modest 3%, share buybacks and a £3.2bn web money pile add enchantment.

But I share my robotic buddy’s scepticism. As an power explorer and utility proprietor, it’s an unwieldy hybrid. I already personal BP, so don’t want extra power publicity. And I wouldn’t purchase British Fuel if it was a standalone inventory.

Its view on BT

I spent a lot of 2024 operating the rule over BT Group earlier than deciding to not purchase it. ChatGPT appeared to share my scepticism. It flagged quite a few challenges for the sprawling telecoms large, particularly fierce competitors, excessive debt attributable to heavy funding in Openreach broadband and 5G, large pension obligations and missteps like its expensive BT Sport enterprise.

That stated, BT’as largely accomplished its funding in Openreach, so the rewards may quickly comply with. It has additionally eased issues over BT Sport by promoting a majority stake to Warner Bros.

But declining revenues in conventional areas like fixed-line companies stay a priority. ChatGPT aptly described BT as a “basic case of an organization attempting to modernise whereas grappling with legacy points”, with long-term rewards requiring “short-term ache”.

Regardless of these points, BT’s shares are up 22% prior to now 12 months. They’re additionally low cost buying and selling at 7.6 occasions earnings with a tempting 5.7% dividend yield.

Centria and BT Group each look somewhat messy to me. Too many fingers in numerous pies. I’ve thought of shopping for them however finally determined to focus on cleaner, leaner, less complicated firms. If I owned these shares, I wouldn’t promote in a heartbeat. However I’m in no rush to purchase them both.