Three to buy
Greene King
The Daily Telegraph
Brewer and pub operator Greene King is at the "point of maximum pessimism" as higher payroll costs, rising business rates and sterling's devaluation take their toll. But with the price/earnings (p/e) ratio now into single figures, these risks are already priced in. The firm is well run and has an excellent record of dividend growth over six decades. 666p
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LXI Reit
The Mail on Sunday
With an uncertain economy and rising inflation, companies that pay a decent dividend are increasingly attractive. LXI Reit joins the stockmarket on 27 February, aiming to raise £200m to £300m to buy commercial properties and let them on long-term, inflation-linked leases. The management and board are "extremely experienced" and the business plan looks sound. Buy to secure an income yield of 5% and rising. 100p
Parity
The Daily Telegraph
The shares of this small recruitment and consulting specialist have done poorly in the last five years, but an encouraging trading update suggests things could be looking up. New management is focusing the business on a niche in the utilities sector, helping water companies prepare for deregulation. But investors should keep an eye on the shaky balance sheet, which could smother any recovery. It's a speculative buy. 10.25p
Three to sell
St Ives
Shares
Investors may be tempted to buy into the printing and marketing services firm after a year that has seen its shares dive 70%. But the company issued its third profit warning in a year this month after losing a printing contract with HarperCollins and "further nasty surprises" could be on the way. A dividend cut or suspension could come on 7 March when St Ives reports half-year results. 59p
Capita
Investors Chronicle
Things are likely to get worse before they get better for this support-services group, which has issued two profit warnings in short order. Clients delayed decision-making after the EU referendum, and it experienced problems with a computer system for Transport for London, which hurt the IT division. Growth is likely to remain flat, and it is struggling with high debt. 519.5p
NEX Group
The Times
Third-quarter results for this trading technology firm looked strong, boosted by a weak pound and the post-election "Trump bump", which resulted in a short term-boost in trading volumes. However, these tailwinds are now ebbing. NEX could be a takeover candidate, but that's far from certain. Shareholders would be wise to take profits from its recent rally. 546.25p
And the rest
Shares
Car insurer Hastings may benefit from changes to compensation payment rules (233p). All businesses must comply with digital accounting rules by 2020 and accounting software supplier FreeAgent should profit from this shift (116p). Flavour and fragrance specialist Treatt would be a quality addition to any portfolio (259p). The price/earnings (p/e) ratio of safety-kit maker Halma is at a two-year low, but the shares should rebound (955.5p). A decision to stock third-party brands should help budget footwear group Shoe Zone (178p).
Investors Chronicle
Low operating costs, low risk and good cash generation make newly floated Diversified Gas & Oil a buy (58p). Property group Derwent London continues to generate strong rental income (2,609p). The shares of palm oil company MP Evans have gained 63% over the last two years, but there may be more upside to come (719p).
The Daily Telegraph
Income hunters should watch for full-year results at property developer and manager CLS Holdings as it starts to pay a dividend (1,660p). The water industry continues to deliver good news, and Severn Trent looks attractive (2,310p).
The Times
Waste-management business Shanks looks to have got a good deal with its takeover of Dutch group VGG (96p). Intellectual property services firm translator RWS Holdings has a strong record of revenue growth (349.5p).
IPO watch
The Guinness Oil & Gas Exploration Trust is a closed-end investment company that plans to invest in junior oil and gas companies whose share prices have been depressed by the industry sell-off in 2012-2014 and the collapse in the crude oil price. The trust's managers, Guinness Asset Management, hope that the industry's major players will return to the market, leading to a flurry of acquisitions. They are targeting a gross annualised return to investors of "approximately 25%". There will be an annual fee of 1.5%, and a performance fee of 20% of any returns over 8% per annum. No dividends will be paid: all returns will come from capital growth. The shares will be listed on the main market of the London Stock Exchange, with trading expected to start on 27 February.
A German view
Shares in Austria's Andritz have risen fivefold since the global financial crisis, and the outlook remains encouraging. Andritz is an industrial machinery group spanning an unusually broad range of businesses and regions, which tends to temper the impact of a downturn in a particular segment or country, as Brse Online points out. Offerings include plant systems and services for the hydroelectric power and paper industries, furnaces for steel and copper plants, and aluminium production lines for the car industry.
Andritz is benefiting from the global trend towards renewable energy, with the hydroelectric division's orders up 43% year-on-year in the third quarter of 2016 amid a rebound in energy prices, notes Wirtschaftswoche. Profits could climb to €300m this year on €6.2bn of turnover. The stock yields 2.7%.
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