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
Bluejay Mining
The Mail on Sunday
Greenland's strict environmental laws and harsh climate deter most mining ventures, but that hasn't stopped Australian geologist Rod McIllree, who is developing one of the world's largest ilmenite projects. Ilmenite is used to make titanium dioxide, an essential pigment in white paint, sunscreens and make-up. Prices are rising thanks to tight supplies. Production is facing hurdles, but the authorities are supportive. 17p
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Coats
Shares
There is a re-rating underway at the industrial thread maker, which provides threads for everything from shoes to tea bag strings and seatbelts. The shares soared when it was promoted to the FTSE 250. Operating margins have risen with scope for more progress. 76p
Playtech
The Sunday Telegraph
The gaming software group's stock slipped in June when founder Teddy Sagi sold shares, but online gambling is "going gangbusters". The UK market is expanding by around £600m a year. The business is unaffected by the gloom hitting other betting firms ahead of a government crackdown on fixed-odds betting terminals. Playtech is trading on just 12 times next year's forecast earnings. 946p
Three to sell
Go-Ahead Group
The Times
Southern Rail Franchise operator Govia, in which Go-Ahead owns a 65% stake, has lost the franchise for rail services between London and the West Midlands. It's not clear why, but this has fuelled concern that the reputational damage over the Southern Rail fiasco could affect other parts of the business. The prospect of further franchise losses will create more uncertainty. 1,744p
Purplebricks
The Sunday Times
Shares in the online estate agent have "taken off like a rocket" this year, and the business is now worth £1.2bn "remarkable given that it has never made a penny of profit". The market is betting on expansions into the American and Australian markets, but the plans sound like "estate agent's patter". Add a slowing domestic market to the picture and the shares are a sell. 444p
Vertu Motors
Investors Chronicle
A recent trading update at the car dealership has highlighted "everything that could go wrong in the car market this year". Profit margins for used cars are starting to slip, while the new-car market is contracting. A government diesel scrappage scheme in the UK could provide a boost, but would also leave motor retailers needing to write-down obsolete stock. 42p
And the rest
The Daily Telegraph (Questor)
HarbourVest Global Private Equity is astonishingly diversified, with stakes in more than 7,000 businesses. It offers "superior returns" (1,261p). Building firm Galliford Try offers the rare combination of a high dividend yield coupled with significant growth (1,329p). Emerging markets and next-generation products make British American Tobacco a buy for patient long-term investors (4,836.5p).
Investors Chronicle
Fidelity Global Dividend Fund is a good choice for those looking to diversify their portfolios away from the "highly concentrated" UK equity income market (173.6p). A strong third-quarter at Apple confirms that the tech giant still offers "both quality and growth" ($156.40).
The Mail on Sunday
Highly adventurous punters might consider a few shares in travel business Minoan Group, as a long-awaited holiday resort in Crete finally gets planning permission (8.375p).
Shares
Chinese internet titan Tencent has taken a 9% stake in independent video-games creator Frontier Developments, unlocking opportunities for further upgrades (650p).
The Times
Holiday demand has proven unexpectedly resilient, supporting a double-digit earnings growth forecast for TUI Group (1,251p). Industrial valve maker Rotork is risky, but offers plenty of potential upside (233.5p).
An American view
Shares in Chinese internet giant Baidu have lagged behind rivals Alibaba and Tencent for most of the year, but now they're "back with a bang", says Daniel Shane in Barron's. "China's answer to Google" beat analyst expectations with an 83% year-on-year rise in quarterly net income in the second quarter, helped by a rise in mobile advertising revenue. "The best could be yet to come", however. Baidu's iQiyi has the potential to become China's version of US streaming platform Netflix with its growing number of subscribers. The group is also spearheading Chinese research into artificial intelligence, with an emphasis on self-driving cars, which it wants to introduce to Beijing by 2020. What's more, the stock is still trading on a discount to its big domestic internet rivals Tencent and Alibaba.
Listings watch
Kosmos Energy is set to become the biggest oil and gas company to join the London Stock Exchange since the oil-price slump three years ago. It is pursuing a secondary listing here to add to its presence on the New York Stock Exchange. The Dallas-based group, which had a market capitalisation of $2.5bn in New York in the beginning of August, is considered a highly successful explorer after several discoveries in west Africa. It has strong ties to the UK as it has teamed up with London-listed Tullow Oil and BP for drilling campaigns in Africa. Kosmos hopes listing in London, where the energy sector is significant, will bring it more attention; in New York it is one of the few firms of its kind. Kosmos is planning to list before the end of September.
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