Share tips of the week

By MoneyWeek

published 28 July 2017

MoneyWeek's comprehensive guide to this week's best share tips from the rest of the UK's financial press.

Three to buy

Accesso

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This technology firm develops cloud-based software so visitors to theme parks can queue virtually and avoid waiting. Clients include a major operator in the US and Alton Towers owner Merlin Entertainments in the UK, while opportunities are also arising in emerging markets and ticketing for sports events and concerts. The shares trade on a high price-to-earnings multiple, but earnings are growing fast. 1,650p

CentralNic

The Mail on Sunday

CentralNic owns and sells top-level internet domain suffixes the bit that follows the "dot" on website addresses. It is the world's leading distributor of such names, managing six of the top 20. Revenues are reliable as firms tend to stick with the same provider and consolidation of a fragmented industry is likely over the next few years. The shares are a bargain at the current price. 51.5p

Morgan Sindall

The Sunday Times

Construction firms have had a tough time of late, with Carillion adding its name to the sick list this month after a profit warning saw its shares tumble 70%. Yet it seems Morgan Sindall can "do no wrong": it consistently tops the index of the contractors winning the most work, with most being small or medium contracts, which diversifies risk. The cash pile should fund expansion as rivals stall. 1,284p

Three to sell

Carillion

The Daily Telegraph

A profit warning, the cancellation of the dividend and the resignation of the chief executive have confirmed fears about the construction services firm. Debt is reportedly above £800m and the pension liability is considerable. A recent HS2 contract award provides hope, but investors should remember that the shares would be "a punt, not an investment". 67p

Halfords

Investors Chronicle

The high-street bicycle retailer could fall victim to shrinking margins as sterling's fall, rising business rates and higher staff costs take their toll. Its autocentres division was once hailed as an engine of future growth, but like-for-like growth seems to be stalling. Add in the surprise departure of chief executive Jill McDonald and the shares are best avoided even at the diminished price. 334p

Nichols

The Times

The soft-drinks group, which owns the Vimto brand, has announced the purchase of a distributor in the north of England for £6m. Halfway figures show erosion of margins in the wake of sterling's fall, but the firm is still gaining market share in the UK and saw business grow by 31% in Africa. The shares have risen from just above £11 at the start of last year to a "hefty" 26 times earnings. 1,815p

And the rest

The Daily Telegraph (Questor)

Dart Group's low-cost airline Jet2 has opened a new hub at Stansted airport, but the market is underestimating its potential (520p). Shares in commodities firm Glencore are going cheap, though boss Ivan Glasenberg's penchant for deal-making makes them a risky buy (313.5p).

Investors Chronicle

The market still hasn't cottoned on to the recovery at luxury interior-furnishings group Walker Greenbank, which is bouncing back after a disastrous flood (228p). Gold and silver mining shares can be volatile, but Russia-focussed Polymetal looks good value (890p).

Excellent cash generation at toilet-paper maker Accrol shows that "boring can be beautiful" (151p). The consumer outlook is getting tougher, but drinks wholesaler Conviviality's buying power means it will remain resilient (339.5p). Gateley, the only law firm listed in London, offers good growth prospects and a healthy dividend (175p).

The Times

Construction-materials group Breedon is not going cheap, but numbers suggest it remains a "solid prospect" (88.25p). A solid trading update at Petropavlovsk makes this Russian gold miner a "highly speculative buy" (7p). Kitchens supplier Howden Joinery has yet to be affected by the consumer slowdown, but the shares already look fully valued (432.75p). Reckitt Benckiser's disposal of its food business is a good deal, but growth is likely to remain muted (7,937p).

IPO watch

One of the biggest suppliers of pizzas, ready meals and desserts to Marks & Spencer and Tesco is gearing up for a flotation that could value it at up to £1.5bn. Bakkavor founded in 1986 by two Icelandic brothers is also the UK's biggest maker of hummus. The firm has been working with adviser Rothschild since the start of the year, and has now reportedly hired a team of advisers at HSBC and Morgan Stanley to work on a share sale that could be launched later this year. The firm made pre-tax profits of £63.1m last year on revenues of £1.76bn.

A Swedish view

It has been a challenging time for shareholders in online gambling company Mr Green lately, but a new strategy will boost growth and profitability, says Affrsvrlden. In the past three years, its shares have been stagnant while the average company in the gaming sector has rocketed 130%. Mr Green has grown relatively quickly, but high marketing costs, depreciation and reservations over a possible tax hit in Austria have weighed on profits.

However, this year the stock has revived. The firm has reported relatively high growth, record high customer deposits and increasing operating profits. It has also expanded geographically in Latin America and acquired Danish online operator Dansk Underholdning. On a p/e ratio of 10 times forecast earnings for 2018, the stock looks good value.