Share tips of the week

Three to buy

H&T

The Mail on Sunday

H&T is the UK's largest pawnbroker, with 181 shops. Pawnbroking saw a decline in customers after the gold price fell in 2012, yet H&T came through better than its rivals. It is now expanding into higher-growth areas, such as foreign exchange and personal loans, where it charges lower interest rates than payday lenders. The shares have performed well of late, but the Mail thinks there is still room for growth. 270p

Subscribe to MoneyWeek

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

Get 6 issues free

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

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

Sign up

Bovis Homes

The Daily Telegraph

With interest rates set to rise and higher taxes on private landlords, you could be forgiven for feeling pessimistic about the housing market. Yet demand remains strong and Theresa May's proposed "garden towns" will ensure steady work for housebuilders. Bovis, which is focused on the wealthy southeast but not the slowing London market, is a good way in. 839.25p

Diageo

Shares

The drinks giant has strong global brands, including Guinness, and the US and Chinese drinks markets are growing after a poor few years. The weak pound also makes Diageo's scotch more competitive abroad. A prospective p/e ratio of 21.1 "appears frothy", but it's worth paying a high price for a quality stock with a sustainable dividend. 2,173p

Three to sell

Pearson

The Sunday Telegraph

Shares in the educational publisher which has substantial operations in the US have risen of late. But Pearson faces problems as more American students choose to rent rather than buy textbooks. There are no signs that "Trumpflation" will include more spending on education. For all its talk of digital innovation, Pearson remains "in the dead trees business" and could pay the price. 817p

AO World

Investors Chronicle

Online white-goods seller AO World suffered an 8% drop in its share price last week despite releasing a trading update that showed a 12.3% rise in sales and a 28.4% jump in European revenues. The results came in below the expectations for a market that had become used to rising growth rates at AO. Given the risk of a UK economic downturn, the shares could still have further to fall. 170p

Hays

The Times

Hays' UK recruitment business saw a second quarter of contraction as Brexit made employers wary of taking on staff. The UK accounts for 25% of business, and Australia, Germany and France all performed better. But the shares have already come a long way since falling below 100p after the referendum. Now selling on 19 times earnings, "further upside may be limited". Avoid. 157.5p

And the rest

The Daily Telegraph

F&C Commercial Property Trust has limited borrowing and a solid history of dividend payments (135.75p). Growing demand for meat in emerging markets should help sausage-skin maker Devro (193.5p). A reliable income and coming regulatory shakeup makes water utility Severn Trent a tempting pick (2,214p).

Investors Chronicle

Those steering clear of UK property could look at Germany-focused Sirius Real Estate instead (€0.53). Industrial engineer Fenner will benefit from recovery in the oil market (285p). Strong Christmas sales suggest discount retailer B&M European Value Retail has real momentum (305p). Retailers are turning to logistics firm Wincanton to manage multichannel sales and deliveries (233p).

Shares

A new contract could be pending for theme parks technology specialist Accesso (1,520p). A US infrastructure boom could boost generator supplier Aggreko (987p). Housebuilder Persimmon is an income play with a solid balance sheet (1,939p). Online musical instruments retailer Gear4music should benefit from changes in UK retail (519p). Power supply specialist XP Power is cheap given its strong R&D (1,790p).

The Times

Food wholesaler Booker Group is beating forecasts (185.5p). Property firm Capital & Regional is a reliable dividend payer (54.25p). Centamin is a well-run gold miner that pays a dividend (152.28p). Weakness in digital payments firm Paysafe is a buying opportunity (381p).

IPO watch

Hybrid Air Vehicles (HAV), the Bedfordshire-based airship maker, is considering a flotation on the stockmarket, says James Hurley in The Times. The firm hopes to raise £50m, most likely by listing on Aim, the London Stock Exchange's board for smaller companies, in late 2017 or early 2018. HAV makes the Airlander 10 airship, which was developed for the US armed forces. The "flying bum", as it's been called, is the world's biggest aircraft, at 93 metres long.

HAV also hopes to raise £30m in debt financing, says Lynsey Barber in City AM. It has raised around £17.5m in equity and debt funding since it was formed in 2007, says Crowdfund Insider's Samantha Hurst, most recently raising £1.2m £700,000 over its target on crowdfunding site Crowdcube.

A German view

Shares in German semiconductor maker Infineon rose by a fifth in 2016, and they shouldn't run out of puff any time soon. The group looks well positioned in industries with long-term growth potential, according to DZ Bank. Its three main sectors are energy efficiency, security, and mobility. The automotive business accounts for 41% of sales, and the shift towards electric and hybrid cars bodes especially well. These cars contain chips costing around $700 per vehicle, compared with $350 for conventional cars, says Wirtschaftswoche.

The recent takeover of International Rectifier reflects a growing emphasis on 300-millimeter wafers, a cost-effective semiconductor component that should help bolster overall profitability. The weak euro should have a similar effect. Deutsche Bank has a price target of €20.