Three to buy
Howden Joinery
Shares
The kitchen supplier has seen its share price fall 28% since the referendum on EU membership, yet builders merchants have been reporting strong activity in recent months. This suggests the housing market remains robust and that the current share price weakness therefore represents an excellent entry point. 369p
SSE
The Sunday Times
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The energy giant is being squeezed between higher wholesale energy prices and politicians angry about consumers' bills. Its shares are down about 8% since last autumn as income-focused investors switch out of utilities. But SSE continues to perform strongly and has a "rich pile of assets". With a yield of 6%, "the pros outweigh the cons". 1,485p
Hargreaves Lansdown
The Daily Telegraph
Hargreaves Lansdown, the FTSE 100-listed investment platform, charges more than its competitors, but still retains the "lion's share of available custom" because it offers do-it-yourself investors an excellent service. It has never borrowed money and is hugely profitable, with margins of more than 50%. The shares are not cheap on 32 times earnings, but they are still ones to "tuck away for long-term growth". 1,320.5p
Three to sell
Pearson
Investors Chronicle
The former owner of the Financial Times is now a specialist education publisher with a strong focus on North America, where market conditions are challenging. Other firms in the industry have been quick to manage the turn to digital publishing, but Pearson remains wedded to print. Add in five profit warnings in four years and it is hard to be optimistic about the firm's prospects. 588.5p
Whitbread
The Times
The market has reacted harshly to a trading update from the hospitality group. Like-for-like sales at Whitbread's restaurants fell 1.5% in the third quarter. It "is not a good idea to read too much into one quarter's numbers", but the company is an almost pure play on the UK economy at a time when a downturn in consumer spending is expected to bite. 3,900p
Marston's
The Times
Pub chains such as Marston's had a better Christmas than expected, with like-for-like sales that beat the sector average. Cost pressures are a concern, but its mid-price pubs give it flexibility to raise prices if necessary. Nevertheless, market sentiment remains against the pubs sector and that is likely to weigh on Marston's shares for now, so don't expect a re-rating anytime soon. 134.75p
And the rest
The Daily Telegraph
Aggreko has seen "four straight annual drops in earnings", but the power solutions business should be at a turning point (1,022p). Avoid Pearson it looks cheap but has serious problems (619p).
Shares
Electronics manufacturer Stadium has the cash both to fund growth and pay a higher dividend (95p). House prices may fall, but brick makers such as Ibstock will still profit as long as new homes are being built (180.5p). The market is being too gloomy about Vodafone's dividend outlook the 6.3% income yield remains attractive (205.75p). Student accommodation specialist Watkin Jones remains cheap on a p/e of 9.5 (130p). Online retailer Mysale seems to have good earnings momentum (126.25p).
Investors Chronicle
Mining stocks fluctuate with the commodity cycle, but South32 the base metal and coal mining business spun off from BHP Billiton has a strong cash buffer and a conservative approach, which makes it a good pick for the long term (155p). East London housebuilder Telford Homes should profit from the growing demand for "build-to-rent" (324.75p). Newly merged interdealer broker TP Icap is already beating market expectations (437p).
The Times
Weakness in Unilever's shares looks overdone given the strength of the firm's brands and geographical diversification (3,191p). Retailer WH Smith is performing well and a recent share price drop is a buying opportunity (1,584p).
A Singaporean view
A stock that gets 90% of its revenues from a single customer is often seen as unacceptably risky. But Singapore-listed UMS Holdings, which supplies precision components and services that are used in making computer chips, could be an attractively valued play on stronger US growth, says The Edge Singapore. UMS's key client is Nasdaq-listed Applied Materials, a US-based supplier of semiconductor manufacturing equipment. Applied Materials is expected to see strong earnings in the next few years as chip makers ramp up capital expenditure, which in turn should boost earnings at UMS. On a longer-term view, the firm is trying to diversify its customer base, which could eventually make it less risky. The stock currently trades on a price/earnings ratio of just ten and a forecast dividend yield of 8.1%.
IPO Watch
Arix Bioscience is a venture capital firm that invests in early-stage science and technology projects. It helps create new companies from university research projects and takes stakes in fledgling businesses. The firm is set to announce its intention to list on the stock exchange, The Sunday Times claims, citing "industry sources". Arix was founded two years ago with investment from Welsh biotech entrepreneur Chris Evans and "restaurant tycoon" Richard Caring. Its biggest investor is Neil Woodford, and its board includes former Diageo chairman Franz Humer and former Labour cabinet minister John Hutton. Investment bank Jeffries is to run the IPO, says The Sunday Times, and hopes to raise £100m, which would value the firm at more than £150m.
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Thousands of Neil Woodford investors sue Hargreaves LansdownMore than 5,000 people who invested in Woodford's collapsed equity income product are taking Hargreaves Lansdown to court
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