Share tips of the week
MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial press.
MoneyWeek's comprehensive guide to the best of this week's share tips from the rest of the UK's financial press.
Three to buy
Biffa
The Daily Telegraph
This waste-management business recorded an annual net loss, but this was driven by the costs of floating on the stockmarket underlying operating profit was up by 18%. Analysts are tipping solid growth in the year ahead and the shares are attractively valued. Just keep an eye on a proposed "energy from waste" partnership with US firm Covanta, which could increase risk. 198.25p
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Finsbury Food
Investors Chronicle
TV personality Mary Berry has partnered with Finsbury, which already makes products sold under the Disney, Weight Watchers and Thorntons labels, to produce a line of cakes that will hit the shops later this year. The market has been wary of the stock because of weak sterling and rising wages driving up costs, but the group's international division mitigates currency risks. 114p
Ultra Electronics
The Times
US defence spending is picking up and with it the fortunes of this firm, which provides everything from ice protection systems for the F-35 Joint Strike Fighter to sonar buoys for the US navy. Ultra also supplies civil aircraft and has a healthy order book. The shares are not a "raging buy", but should reward patient, long-term investors. 2,020p
Three to sell
Provident Financial
The Sunday Times
Shares in the sub-prime lender slid by 17% after it said that restructuring its doorstep-lending business would hit profits harder than expected phasing out these self-employed agents has sent sales and profits tumbling. Customers who borrow in this way are a "dwindling breed". The firm's Vanquis credit-card arm may eventually help it "regain its mojo", but "until then, avoid". 2,440p
Purplebricks
Shares
Shares in the online estate agent hit a record 460p in June, more than four times the 100p issue price in December 2015. However, momentum may now be draining out of this story as the firm plans a move into the US market. That could prove a "difficult task" in the short term. Several directors have already sold stock and market sentiment is turning, so cash out. 386p
Royal Mail
The Sunday Telegraph
Royal Mail's shares have perked up recently, but are still a "long way adrift" of their 2014 peak of £6. Full-year results contained some encouraging signs, but the core UK business is struggling as letter revenues continue to fall. And things could get much worse. The generous dividend may tempt income investors to hold, but those looking for capital gains should go elsewhere. 431.75p
And the rest
The Daily Telegraph
Low expectations mean power-plant firm Aggreko could surprise on the upside (927.5p). Investors are overlooking miner Anglo American's strengths (959.5p). BlackRock Smaller Companies Trust has a "remarkable" track record (1,175p).
Investors Chronicle
A recovery is under way at equipment-rental business Speedy Hire (55p).Care-home operator CareTech is enjoying growing demand for its services (437p). Wealth manager Brewin Dolphin has a tasty 5.1% forecast dividend yield (331p).
The Mail on Sunday
Vet services chain CVS Group should appeal to long-term investors (1,330p). Litigation finance firm Burford Capital still has room to grow (892.5p).
Shares
Software firm Sopheon has undergone a transformation (330p). Currency fund manager Record should profit from uncertain times (46p). A turnaround at engineering group Rolls-Royce will gather steam (909p). Men's suits specialist Moss Bros is "tailor-made" for profit (102.5p). Shares in showers and taps outfit Norcros look cheap (173p). Medical devices firm Smith & Nephew has new products on the way (1,335p).
The Times
The coming consumer squeeze could spell trouble for hospitality firm Whitbread sell (3,984p). It might be time to take some profits on defence contractor Chemring (189p). Shares in intellectual property specialist RWS are expensive and profit-taking would be wise (395p).
An American view
Investors keen "to add tech exposure without paying Silicon Valley prices" should take a look at "rising software star" NCR, says Jack Hough in Barron's. NCR produced the world's first mechanical cash register in the 1880s and these days its products range from supermarket self-checkout machines to networks and servers for ATMs. It is gradually shifting away from hardware towards higher-margin software and has "snapped up" small firms producing software for products with recurring revenue streams, including smartphone tickets and boarding passes, and grocery retail platforms. NCR also supplies retailers with software that helps them manage inventory or provide staff with mobile checkout machines. A price/earnings ratio of 12 times forecast 2017 earnings looks reasonable.
IPO watch
GYG provides painting, maintenance and support services to sailing yachts and superyachts, trading across the Mediterranean, northern Europe and the US under a number of brands including Pinmar, Rolling Stock, ACA Marine and Techno Craft. Revenue and earnings have increased steadily over the last few years, and the company intends to pay an initial dividend of 3.2% in December 2017, and 6.4% the following year. GYG will list on Aim, issuing 6.9 million new shares on top of the 21.5 million existing shares, valuing the firm at £46.6m. The listing will give the GYG an "increased reputation and profile", the ability to create incentives for key employees and to use the shares as "currency for potential future acquisitions". Trading is expected to begin on 5 July.
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