Share tips of the week
MoneyWeek’s comprehensive guide to this week’s share tips from the rest of the UK's financial pages.
MoneyWeek's comprehensive guide to this week's share tips from the rest of the UK's financial pages.
Three to buy
AB Foods
Shares
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Associated British Foods sells tea and sugar, but it also owns Primark, the hugely successful clothes chain. Total group sales have fallen, despite it benefiting from a drop in sterling, and the shares are down. But even after several years of breakneck growth, Primark's potential is huge, especially in the vast US market, where it is opening new stores. Analysts at Liberum thinks the shares will rise by a third. 722p
Finsbury Food Group
The Daily Telegraph
Finsbury has rapidly grown into one of the biggest players in the bakery market, selling £300m-worth of cake each year. Its growth has been fuelled by deals, with two rival bakers acquired in three years. It has expanded from supplying supermarkets to hotels, pubs and coffee chains. It is also investing in manufacturing upgrades to lower costs. At 12 times earnings, investors should "indulge" in the shares. 134p
Hummingbird Resources
The Mail on Sunday
The Betts family has been involved in the gold business for 250 years, smelting and refining precious metals in Birmingham. Ten years ago, Dan Betts, then 31, made the jump and expanded into mining. He founded Aim-listed Hummingbird, which is digging its first mine in Mali. The company is well funded and the gold price keeps rising. Investors should roll the dice. 25p
Three to sell
AG Barr
Investors Chronicle
Scottish drinks business AG Barr, the firm behind Irn-Bru, is going flat. The soft drinks market is contracting in the UK, as customers reach for healthier options. Prices are also under pressure, thanks to a long-running supermarket price war. The government's recent sugar tax is yet another blow and sales are edging in the wrong direction. 508p
Hiscox
Evening Standard
It is time to sell shares in insurance specialist Hiscox, warn analysts at Peel Hunt. Hiscox is good at "cleverly" limiting risk and has sailed through the hurricane season, but insurance premiums are low and regulation is tough. Insurers are being forced to maintain higher capital requirements, so surplus cash is unlikely to be paid out to investors in a special dividend.1,062p
IG Group
The Times
The spread-betting firm is doing better than its rival, CMC Markets, reporting a 5% rise in revenue in the last three months. But a drop in revenue per client looks ominous. IG has introduced new measures to limit users from over-borrowing, dampening down business. Growth is too difficult to predict and on 19 times earnings the shares look rich. 910p
And the rest
Buys | Row 0 - Cell 1 |
Carr's | The agricultural engineering firm is bumping up its margins (Shares) 158p |
Conygar | Directors are buying shares in the Welsh property firm (Investors Chronicle) 160p |
Dairy Crest | A sell-off caused by milk prices means the butter maker is too cheap (Times) 645p |
Dixons | Dixons is vulnerable to Brexit, but the shares are too cheap (IC) 372p |
Dunelm | The retailer is pushing into London to compete with John Lewis (Times) 873p |
Eckoh | The secure payment processor is well placed in a booming niche (Shares) 39p |
Galliford Try | Housebuilder Galliford is sitting on an overlooked construction division (Times) |
Good Energy | The utility firm is better than rivals at retaining customers (Evening Standard) 218p |
HICL Infrastructure | HICL has a new road project in France and its 4.4% yield is attractive (Times) 175p |
Mattioli Woods | Money manager Mattioli is thriving under new pension laws (IC) 678p |
Micro Focus | Micro's software deal with Hewlett-Packard will boost earnings (Shares) 2,166p |
Ultra Electronics | Ultra's naval unit is winning contracts and the shares are cheap (Shares) 1,693p |
Directors' dealings
An American view
Drug development accounts for the rest of LabCorp's sales. It claims to have been involved in 87% of the new medicines approved by the Federal Food and Drug Administration last year. The group has plenty of cash for further acquisitions and is reasonably priced, on a 2016 price/earnings ratio of 15, considering earnings-per-share are set to climb at a double-digit pace.
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