Three to buy
Next
Shares
Shares in the high-street clothing colossus have fallen too far. Consumer confidence and spending have been hit post-Brexit and a drop in sterling has increased Next's buying costs abroad. But the company is returning surplus cash to investors, via share buybacks and one-off payouts, and its dividend is meanwhile covered nearly three times by earnings. 5,465p
Smiths Group
The Times
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Engineering conglomerate Smiths sells 60% of its products in the US, so is benefitting from the weak pound. Trading has been difficult for John Crane, its largest division, which makes seals, and Smiths is seen as a "perennial" candidate for being broken up into its various businesses. But the group is under new management and is close to finalising a £500m deal to buy Morpho, which makes scanners for airports. 1,352p
Tyman
The Mail on Sunday
Tyman makes parts for handles, windows and locks, and also sells burglar alarms. The shares have dipped on fears that British homeowners will be cautiousspenders following Brexit. But sales in the last six months jumped 15% to £201m, ahead of forecasts, driven by strong sales in the US, which is Tyman's largest market. The interim dividend is also up 13%. 283p
Three to sell
Hargreaves Services
The Times
Hargreaves produces and trades coal in the UK. The closure or winding down of Britain's coal-fired power stations, including Longannet in Fife and Fiddlers Ferry in Cheshire, has hit the company hard. Its coal volumes have tumbled from seven million to two million tonnes in the last year. Debt has ballooned from £1m to £32m, and the share price has tanked.1,344p
Intu Properties
Shares
Consumer confidence is falling, so investors should "dump" shares in shopping-centre landlord Intu Properties. Its shares have almost recovered from a sell-off that rocked property stocks after Britain's vote to leave the EU, but weak spending in shops will feed through into lower rents and even defaults. Analysts at Liberum say revenue will take a hit of 10%.306p
Sports Direct
Investors Chronicle
Investors already know that this year will be "miserable" financially for the beleagured sportswear chain. Brexit, big currency moves, poor weather and a minimum wage scandal have all taken their toll and the shares are down by two-thirds. It now looks like profit will fall next year too, after management failed to hedge against a sudden drop in the pound.300p
And the rest
| Buys | Row 0 - Cell 1 |
| Arbuthnot | The bank is eyeing deals to bulk up its merchant bank (Investors Chronicle) 1,669p |
| Balfour Beatty | The building giant is underpinned by valuable PFI contracts (Sunday Times) 240p |
| Blue Prism | Higher investment is paying off for the robot specialist (Shares) 213p |
| Cobham | The defence firm has properly addressed its balance sheet strain (Shares) 160p |
| Hikma Pharmaceuticals | The shares have dropped, but profits are up and the firm's bullish (Shares) 2,296p |
| Ideagen | The software specialist focuses on the booming compliance market (Shares) 56p |
| Kennedy Wilson | The company is "breathlessly" expanding its property portfolio (IC) 1,011p |
| Lombard Risk Mgmt | Lombard is cashing in on tough new banking regulations (Mail) 8p |
| Looker | The car dealer has £120m of surplus cash to spend on acquisitions (Times) 129p |
| Quarto | The book publisher is too cheap on 6.5 times earnings (Shares) 261p |
| SMS | The smart meter firm is rolling out is products across the country (Mail) 466p |
| Tharisa | The South African platinum miner has reliable production and costs (IC) 68p |
| Worldpay | Worldpay offers a way in to the payment processing niche (Shares) 318p |
Directors' dealings
An American view
"The long-term demand trend could hardly be more favourable" given the ageing population. The target market, senior citizens older than 75 with annual incomes over $50,000, is set to expand by 40% by 2020 and that's before the wave of baby boomers breaks. Brookdale is selling off its less profitable facilities and is cheap on 1.4 times book value.
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