Three to buy
Drax
The Sunday Times
You might think that the owners of Britain's biggest power station and the UK's largest single source of carbon dioxide emissions isn't a bet for the long term. Yet this firm has proven adept at dodging extinction before, jumping early onto the biomass bandwagon in 2004, and now with plans to build the world's largest battery a smart move considering Britain's growing reliance on renewables. 310p
Purplebricks
The Mail on Sunday
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Shares in the online estate agent have had a bumpy ride following another run-in with the Advertising Standards Authority. Nevertheless, the firm now accounts for 72% of the UK's online estate-agent market. Expansion in Australia and plans to grab a slice of the US market promise excellent rewards in the future. 389.75p
Vodafone
Investors Chronicle
Investors in this telecoms group are being rewarded for their patience as a £19bn multi-year investment strategy begins to bear fruit. Revenue is growing in core European markets and there are signs of a turnaround in the Indian business. The 6.6% dividend yield now looks more secure, although the European Commission's cuts to data-roaming charges may prove a "thorn in the side". 213p
Three to sell
Aveva
The Daily Telegraph
This Cambridge-based engineering-software specialist has agreed to merge with French electrical-equipment giant Schneider at the third attempt. The tie-up looks like a good bet in the long-term. Yet investors should consider taking profits on a near 25% gain since last October the structure of the future group is unclear and the shares are trading on a big forward-earnings multiple. 2,425p
UP Global Sourcing
Shares
The hope that this consumer-products distributor could buck broader weakness in the retail market has proven misplaced. The retailers that the firm sells to have cut back on stock purchases, forcing it to release a profit warning. With management warning of no growth in the current financial year and the market losing confidence, it is time to cut losses. 95p
Wm Morrison
The Times
The supermarket has posted soaring profits and falling debt for the second quarter of the financial year, but a slowdown in like-for-like sales growth and signs that it is still losing market share to discounters give pause for thought. Growth is growth, but with weak consumer confidence and pricey shares (on 20 times this year's earnings), there is not much value on offer. 232.5p
And the rest
The Daily Telegraph
Buy miner BHP Billiton its London shares are trading at a discount to those quoted in Australia (1,439.5p). It is getting harder to make good returns from peer-to-peer lending, so it's time to sell P2P Global Investments Trust (819p).
Investors Chronicle
Laundry liquids-to-mouthwash maker McBride is on the acquisition trail after posting annual results that beat expectations (195p). New management is turning around housebuilder Bovis Homes, but the shares are cheap (1,138p). The market is overlooking the long-term upside at language translator SDL (462p).
Shares
Commercial kitchen-services franchiser Filta is expanding fast (170p). Textile rental firm Johnson Service is growing and offers a small dividend (141.75p). Signs of recovery in the personal-care division bode well for chemicals firm Croda (3,866p). Big R&D spending at polymer manufacturer Victrex will bring tax breaks and special dividends (2,335p). The market has been slow to catch on to the transformation at building-products firm Alumasc (171p).
The Times
The share-price pullback at engineering group Ricardo looks unwarranted (775p). An undersupply of homes will benefit builder Galliford Try (1,340p). Biotech stock Abcam expects to double in size by 2023 (1,056p). Retirement income firm Just Group is in growth mode, but that's in the share price (160.75p). Time to take profits at office-services firm Restore after a strong run (525.5p).
IPO watch
Roku, the California-based maker of video-streaming devices, has filed for an initial public offering on the Nasdaq exchange in the US. The firm will offer shares at $14 and hopes to raise $252m. Roku is the US market leader in streaming players with a 37% market share during the first three months of this year. It had 15.1 million active accounts as of 30 June and its users streamed about 6.7 billion hours over the same period.
The firm lost $43m on revenue of $399m last year and has amassed a total of $244m in losses since it was founded in 2002. Roku plans to sell shares with reduced voting rights compared with those held by its existing investors a common trend in recent tech IPOs that is intended to cement the control of founders and early shareholders.
A German view
US legislators insist that drug prices are too high. The row could engulf Germany's Merck, which may be forced to trim the price of Rebif, its drug to treat multiple sclerosis (MS). But even if US sales of Rebif fall by 10%, it would only lower net income by €15m, reckons WirtschaftsWoche. Since the bottom line this year is expected to total €1.6bn, that's hardly worth fussing about. And prospects over the next few years look auspicious.
A new MS treatment has been approved in Europe, and could soon be allowed onto the US market. Merck's most important new drug, a cancer treatment, is already on sale in America. In the firm's other key division, laboratory equipment, a recent US acquisition has been successfully integrated: the operating margin has risen to more than 30%.
