MoneyWeek's comprehensive guide to this week's best share tips from the rest of theUK's financial press.
Three to buy
Babcock International
The Times
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Shares in the engineer and outsourcer have taken a hit with the end of its contract to decommission Britain's ageing Magnox nuclear reactors. However, the firm still enjoys a strong pipeline of upcoming work with more than a 40% win rate for new contracts and 90% for renewals and margins remain attractive, especially at its defence business. The shares still sell on a modest 11 times earnings. 959.5p
Global Benefits Group
The Mail on Sunday
This specialised insurer has an "international twist", helping wealthy expatriates organise private medical insurance and companies wanting to insure their overseas workforce. The firm floated on Aim this February and brokers expect that the dividend will more than double for 2018, putting it on a yield of almost 8%. 142.5p
Hargreaves Lansdown
The Daily Telegraph
Shares in Britain's biggest execution-only stock and fund broker have fallen after low-cost US competitor Vanguard sailed into the UK market with its new online service. Yet Hargreaves still boasts "exceptional profitability and a loyal customer base" that buys on quality and trust rather than price, while the firm also offers a wider range of investment products than Vanguard. 1,367p
Three to sell
Petrofac
Investors Chronicle
The oil services group has seen its shares halve in a month on the back of a Serious Fraud Office investigation that has led to the suspension of the firm's veteran chief operating officer Marwan Chedid (see page 8). Some might see a value buy here, given the share price falls, but lasting reputational damage could undermine the group's ability to win business in the future.It's "a painful sell". 439p
Revolution Bars
Shares
The cocktail bar chain released a shock profit warning, saying that costs are higher than anticipated and some of its new sites are not yet proving to be as profitable as expected. However, management has no excuse for being surprised by the difficulties and the firm now has a "major credibility problem". Avoid until there is evidence that the problems can be fixed. 122.01p
TalkTalk
The Sunday Times
The telecoms firm has gone from a 16% to a 12% share of the retail broadband market in the last four years. Executive chairman Charles Dunstone faces a thankless task: he lacks the funds to compete with Virgin Media's fibre-optic rollout or BT and Sky's content offerings. A "slow, bruising slog" is ahead, mitigated only by the distant prospect of a takeover bid. 181.8p
And the rest
The Daily Telegraph
Veterinary services group CVS is not cheap but has strong earnings momentum and good defensive qualities (1,334p). Real estate investment trust Ediston Property has an entrepreneurial streak improving and redeveloping sites that justifies its high valuation (109.75p).
Investors Chronicle
Healthcare firm BTG has a large portfolio of speciality products that the market has overlooked (651.5p). Recruitment specialist Staffline should benefit from increases to the national living wage (1,362p). A chronic shortage of new housing is driving rental incomes up at residential property business Grainger (261.9p). Shares in mining giant BHP Billiton are down, but this is a good time to "buy the dip" (1,171p).
Shares
Quartix, which makes "black boxes" for vehicle data collection, may expand in the US (385p). Demand for houses is running ahead of supply and smaller builders such as Countryside Properties have bright prospects (301.2p).Retailer Dixons Carphone is in "deep value territory" (328.9p). Small-cap gold miner Stratex is a speculative buy (1.52p).
The Times
HICL, the infrastructure fund, offers a "good, reliable income flow" (171.75p).
Avoid Tate & Lyle protectionism in the US could hurt the cross-border sugar trade (749p). Engineering software firm Aveva is expensive and a takeover bid is unlikely (1,945p). Payment-services firm Paypoint is hard to understand and seems to have few catalysts for growth (959.5p).
A Swedish view
Telecoms firm Millicom, which offers services to millions of customers under the Tigo brand in Africa and Latin America, looks undervalued, says Affrsvrlden. The firm has been taking advantage of consolidation in several markets, such as Senegal and Ghana, to dispose of its businesses there. This will free up cash for investment or for dividends. Earnings growth of just 3.5% is likely in 2018 and 2019, but the firm's exposure to emerging markets' growing middle class and its strategies to move towards higher-value services, such as mobile data, cable TV and broadband, will mean better long-term prospects. Forecasts imply an enterprise value to earnings before interest, tax depreciation and amortisation of 4.5 in three years' time, which is cheaper than its emerging-market peers.
IPO watch
Financial software group Alfa has floated in the biggest UK listing so far this year. The group, which was founded in 1990, sells software to firms such as Barclays and Mercedes to help them manage asset-finance agreements and attracted excitement because it is the largest technology initial public offering (IPO) in London since Sophos floated two years ago. Investors are keen to gain exposure to the fast-growing financial technology sector, but most firms remain in private hands. The shares were offered for 325p each but jumped 31% in morning trading on market enthusiasm, swelling the group's valuation to about £1.2bn. The flotation left executive chairman and co-founder Andrew Page £230m richer, with £24m for CEO Andrew Denton.
