Share tips of the week

By MoneyWeek

published 11 November 2016

in Features

MoneyWeek's comprehensive guide to this week's best share tips from the rest of the UK's financial press.

Three to buy

Ashtead

The Daily Telegraph

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

UK-based Ashtead generates 90% of group profits in the US, renting out industrial and construction equipment. US president-elect Donald Trump has stressed the importance of infrastructure investment, so Ashtead could find itself "in the right place at the right time" if an investment boom is in the offing. The dividend won't excite income hunters, but Ashtead has an "excellent track record" of growth. 1,217p

HomeServe

The Mail on Sunday

HomeServe provides consumers with insurance cover and help with repairs for emergencies, such as burst water pipes and broken boilers that are not covered by standard home insurance policies. Leaking pipes in the home cost an estimated £17bn a year worldwide and HomeServe is well placed to profit. The UK business is growing steadily, and HomeServe bought its major competitor in the US in July. 595.5p

ITV

The Sunday Times

Investors are braced for bad news from ITV's third-quarter update after a tough summer. Yet the gloom at ITV "has been somewhat overblown". Viewers might be drifting away to Netflix, but ITV remains the only commercial channel able to pull in an audience of five million on a regular basis. The shares have been "pummelled" of late, so buy while they are cheap. 168p

Three to sell

Virgin Money

The Times

Shares in Virgin Money are up 50% in three months, recovering from the "panicky days" after the Brexit referendum. Virgin is "snaffling market share", with third-quarter figures showing credit-card balances up by 41% in a year. Investors "lap up Virgin" in good times, but its summer plunge shows how quickly they can desert, and it still looks "vulnerable to Brexit stumbles". 320p

Sage

Shares

Shares in the software firm have doubled in the last two years after the chief executive re-focused its sales strategy and pushed cloud-based products. But they now look expensive, on a price/earnings (p/e) ratio of over 20. With no growth in operating margins since 2014 and expectations of mediocre full-year results, there has not been enough "real progress" in the firm's finances. 716.5p

JD Wetherspoon

Investors Chronicle

Shares in the pub chain enjoyed a "post-referendum party", rising by a fifth since 24 June. But that rally has come to "a sobering end", with shares falling 7% with a fall in like-for-like sales. The chairman says Brexit will not hurt the sector, but the shares could yet fall further. 830p

And the rest

Swipe to scroll horizontally

Buys	Row 0 - Cell 1
B&M Retail	The discounter will profit from consumer belt-tightening if the economy slows (Telegraph) 235p
Clarkson	Enjoy the shipping broker's dividend whilst you wait for global trade to pick up (Telegraph) 2,024p
Conviviality	Shares in the drinks wholesaler and retailer offer a generous yield (Times) 214p
GB Group	GB's expertise in online identity verification puts it in a fast-growing sector (Telegraph) 237p
McColl's	The retailer's profits should "soar" once a deal to buy 298 Co-op stores is approved (MoS) 170p
Morses Club	The recently floated sub-prime lender is growing its loan book at a fair clip (IC) 120p
Next	Shares in the retailer have fallen too far and now offer a 6% yield. (Times) 4,979p
Ophir Energy	With the oil price stabilising, the energy explorer's shares have little downside (IC) 75p
Plant Impact	The agrichemical supplier is making losses now but should come good (Shares) 50.2p
Regional Reit	Regional has invested outside London, where demand for office space remains solid (IC) 107.25p
RELX	The specialist publisher offers strong margins and a growing dividend. (Shares) 1,464p
Savannah Resources	The tiny copper miner is the AIM index's "best-kept secret". (Shares) 4p
Tate & Lyle	Shares are not cheap, but the specialty foods business should grow strongly (Times) 807p
TLA Worldwide	The sports marketing group looks cheap after brushing-off a takeover attempt (Shares) 39p
UDG Healthcare	The healthcare outsourcer's recent acquisitions should boost earnings (IC) 654.5p

Directors' dealings

An American view

Investors on the lookout for a "high-quality" business with few competitors should consider Allison Transmission, says David Englander in Barron's. This "giant in the industry" sold 63% of the automatic transmissions used in medium and heavy-duty commercial lorries around the world last year. The complex technology required, along with safety concerns, keeps rivals out of the market. Sales have slid of late, but a recovery is on the cards. The decline in demand for oil drilling and mining vehicles appears to be bottoming out, while its new transmission for tractor-trailers could gain traction. Outside the US, vehicles tend to use manual transmissions, but Allison "has made inroads" with its product overseas too. A "highly regarded management team" bodes well for the long term.