Share tips of the week
MoneyWeek’s comprehensive guide to this week’s share tips from the rest of the financial press.
MoneyWeek's comprehensive guide to this week's share tips from the rest ofthe financial press.
Three to buy
Autins
SharesInvestors are clamouring to buy into Autins, which supplies noise and heat management products for the automotive industry. The firm works with outfits such as Jaguar Land Rover and Bentley to help them make vehicles that run more quietly. Autins is raising funds for expansion and is a fascinating business with considerable growth potential. Just watch out for its overreliance on a few major clients. 206p
Concepta
The Mail on SundayConcepta has developed a simple product that helps women with fertility issues to become pregnant. The MyLotus kits, which tell women when their luteinising hormone levels are low or high, have been approved for sale in China, while European sales should begin in 2018. The firm is small today, but could generate annual sales of £600m in the next few years. Buy now and the shares could go far. 12.63p
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Gym Group
The Sunday TimesGym Group is a low-cost health and leisure operator with 80 sites. The gym market is highly competitive and the shares have taken a hit of late, but interim results this week should show a return to form, with the company's offer of £16-per-month memberships helping to boost sign-ups. Although membership fees are low, Gym Group has cut costs by having online sign-ups and now looks in good shape. 203p
Three to sell
Laird
SharesThe electronic components supplier is unlikely to meet its yearly trading targets. Laird makes components for smartphones, and in the past strong Christmas sales have carried it through. But global smartphone sales are in decline, so Laird will struggle this year, compounding the problems created by the recent departure of the chief executive, David Lockwood. 299p
Restaurant Group
The TimesShares in the restaurant owner, whose stable includes Frankie & Benny's, have fallen from £7 to as low as 250p last month. After three poor trading updates and a change of management, analysts expect a cut in the dividend to follow soon. New openings have been scaled back as the company looks for a way out, but on 30 times earnings the shares are still too expensive. 420.5p
Tate & Lyle
Investors ChronicleTate & Lyle is no longer linked to the eponymous bags of sugar found on supermarket shelves. It now focuses on speciality food ingredients and sweeteners, such as sucralose. The firm faces several long-term issues, including the lifting of European sugar quotas in 2017 and the growth of other sweeteners, such as stevia. On 19 times earnings, the shares look anything but sweet. 739p
And the rest
Buys | Row 0 - Cell 1 |
Allied Minds | This incubator of ideas from top universities is a good long-term bet (Times) 384p |
DS Smith | The packaging supplier offers strong growth prospects (Investors Chronicle) 417p |
Gem Diamonds | This miner is cheap and looks like a good income stock (IC) 123p |
Hostelworld | The travel booking platform offers an 8% dividend yield (Shares) 166.75p |
HSS Hire | The worst news could now be over for the equipment-rental firm (Shares) 78.25p |
Kingspan | High-margin growth makes this building-products firm a buy (Times) €24.45 |
Next Fifteen Comms | The public-relations group is expanding, but remains cheap (IC) 315p |
Persimmon | The housebuilder shrugged off Brexit fears with good results (Times) 1,883p |
UBM | The events firm has money for deals after selling its Newswire arm (Shares) 697p |
Sells | Row 10 - Cell 1 |
Paddy Power Betfair | The gambling group is doing well, but its shares are overpriced (Times) 9,735p |
Image Scan | Investors should be wary of the tech micro-cap's track record (Shares) 6.75p |
Jimmy Choo | The shoe king relies on Asian sales and growth there is slowing (IC) 124p |
Directors' dealings
Richard Hutton, finance director of Greggs, has offloaded 41,000 shares in the high-street baker, for a total of £432,285. Hutton still keeps a stake in Greggs through his remaining 36,924 shares (which amounts to 0.037% of the business). In common with many retailers, shares in Greggs took a knock after the vote to leave the European Union. However, they have since recovered after the firm announced good interim results at the start of August. While the outlook for retailers remains uncertain, Greggs might benefit from consumer belt-tightening due to its low-cost products.
A French view
Logistics group STEF specialises in transporting agricultural products and other temperature-sensitive goods. The firm is based in France and operates across six other neighbouring European countries. STEF's business model differs in one important respect from most competitors, says Investir; it continues to invest a substantial amount in building up its own network of logistics properties, meaning that it is to some extent a real-estate firm as well as a traditional logistics operator. The company operates in a defensive niche, enjoys steady, recurring revenues and is well-diversified, with no client accounting for more than 5% of its sales. Overall, it's a solid business and remains attractively valued on a price/earnings ratio of just 10.7 times forecast earnings for 2016.
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