MoneyWeek’s comprehensive guide to this week’s share tips form the rest of the UK’s financial press.
The Sunday Times
Investor activism from Elliott Advisers has been instrumental in turning things around at the aerospace and defence firm. Elliott has been rewarded with a 30% rise in the share price since it bought in and with “the housekeeping done” may now consider selling the whole business to one of Meggitt’s bigger suppliers, which would be a boon for shareholders. 458.25p
The Mail on Sunday
Frenkel Topping specialises in managing money for the victims of catastrophic accidents and has around £750m of customer assets under management. The firm stands to benefit from changes in the way compensation payments are calculated, with £1bn-£2bn extra now expected to be paid out annually for such claims. 61.5p
Blue Prism’s Robotic Process Automation software is used to perform routine clerical and administrative tasks that used to be carried out by humans. Shares are up by 500% in less than a year and new deals mean that it is already on course to beat 2017 forecasts. 473.5p
Three to sell
Rising demand for cybersecurity services led NCC to pursue a highly acquisitive growth strategy. But three profit warnings in five months have highlighted its low margins and vulnerability to fluctuations in revenue, while mounting debt could undermine the balance sheet. The shares are still dear on 15.5 times current-year expected earnings. Investors are “better off out of it”. 107p
The Daily Telegraph
The outsourcing services support group has announced that it will need to book an extra £90m in provisions because of a troublesome waste-to-energy contract in Scotland. The news sent its share price tumbling by almost a third. Net debt looks set to shoot up to £450m in the year ahead, and without further clarity on cash flow investors should hold off buying. 239.5p
Virgin Money has been expanding its credit card operation, which grew by 55% last year to £2.bn, by “dangling eye-catching interest-free periods” in front of potential borrowers. It says it maintains the “highest lending standards” – and it is true that defaults are low for the time being. But if Brexit starts to bite and borrowers begin to lose their jobs, Virgin will be in a pickle. 327p
And the rest
Investors wanting exposure to the property market but not the southeast should try housebuilder MJ Gleeson (589p). Distribution firm Bunzl’s share price has doubled in the last four years and there should be more gains to come (2,239p). Aim-listed technology firm Zytronic offers a 4%-plus dividend yield (405p). Recovering markets bode well for animal genetics specialist Genus (1,733p).
Political uncertainty means the gold price should pick up, and miner Pan African Resources looks cheap (17p). Property group Unite is enjoying solid rental growth from its student accommodation (632.5p). Expanding defence budgets have buoyed shares at BAE Systems, but there is much more to come (605p).
The Daily Telegraph
Hi-tech imaging firm Kromek has convinced the US government that its finances are rock solid, so new orders could follow (32.75p). Wrapping paper and greetings cards maker IG Design is growing sales (285p). Building products maker Alumasc is in a promising position (202p). Special dividends or share buy-backs are on the cards at supermarket Wm Morrison (245p).
Chemicals company Croda International has reported another strong set of results (3,466p). A share price fall at Merlin Entertainments looks like a buying opportunity (482p). Support-services firm Carillion is heavily shorted, but investors with an appetite for risk might feel it now looks too cheap (206.5p).
A German view
Krones makes machines that fill, label and package bottles and cans. The drinks industry is its biggest market, at 80% of revenue, but it also serves the chemicals and pharmaceuticals sector. Upcoming results should show turnover climbed to around €3.3bn last year and net profits should have reached about €160m. Longer term, population growth and the rise of the middle classes in emerging markets bode well, as Wirtschaftswoche notes. These trends will bolster demand for packaged drinks and the machines that make them. Krones already makes 16% of its sales in Africa and the Middle East, where demand is growing especially quickly. A healthy balance sheet will facilitate acquisitions and means Krones doesn’t have to worry about rising interest rates. The stock also pays a small yield of 1.41%.
Financial software developer Misys abandoned its flotation on the London Stock Exchange last October due to difficult market conditions. The deal would have have been the biggest ever technology IPO on the UK market. Before abandoning the flotation, Vista Equity Partners, the company’s private equity owners, had already reduced the size of the float from £5.5bn to £3.5bn, but still failed to entice enough investors to go ahead. Now, however, Misys looks like it might be coming back for a second try – but this time, it’s “exploring New York as a listing venue”, say Alistair Gray and Nic Fildes in the Financial Times. Nasdaq is rumoured to be the favourite market, although the firm has apparently not ruled out another attempt to list in London.