MoneyWeek's comprehensive guide to this week's share tips.
Three to buy
GYG
The Mail on Sunday
GYG paints and refits superyachts. Such work is specialised and this newly listed Aim firm is a leading player, with a 30% market share and a reputation for quality work. Interim results show revenue up 19% and a record order book. The world's growing number of billionaires should boost the stock. 137.5p
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Syncona
The Sunday Times
Syncona is a "rare beast" on the FTSE, being "both a fund of funds and a direct investor in promising biotech companies". Its investments span gene, cell and DNA therapy, with applications including prostate-cancer diagnostics and treatments for blindness. The shares are up over 40% this year, but with a growing portfolio there is more to come. If it can strike lucky with a few of its bets, it's a decent prospect. 188p
Legal & General
Shares
Investors interested in well-known names that pay solid dividends often have to pay dearly, but this financial-services firm is cheap. L&G offers pensions, insurance and investment products for an ageing population. Lower growth in life expectancy means the firm can set aside less cash for pension payments and the asset-management arm is doing well. A 6.4% dividend yield looks attractive. 256p
Three to sell
ConvaTec
Investors Chronicle
Investors piled into this medical-equipment specialist when it floated in 2016 amid excitement about its prospects as the population ages. Yet the firm's private-equity owners have reduced their stakes this year amid signs of shrinking margins and high debt. Top-line growth is disappointing and currency movements are likely to trim profits. Follow the former owners out the exit door. 269p
Mitchells & Butlers
Investors Chronicle
The English summer did not offer a lot of sunshine this year, much to the disappointment of investors in this restaurant and pub group. The firm saw its total sales growth falling to 0.3% in the eight weeks to mid-September, which management blamed on the poor weather. Yes, the shares look cheap compared with its history, but that may reflect limited prospects. 235p
Stagecoach
Investors Chronicle
Shares in the transport group look cheap on a historical basis at eight times forward earnings after falls since the start of 2016. Sales growth at the group's Virgin Trains East Coast operation is also encouraging, but it should be balanced against the loss of the South West Trains franchise. Add in recent contract losses with TfL, and the shares are not worth buying even at the current price. 167p
And the rest
The Daily Telegraph
Shipbroker Clarksons is yet to regain its all-time high even as global trade rebounds (2,861p). Low expectations could bring profits for those willing to take a punt on Marks & Spencer ahead of interim results (347.25p).
Investors Chronicle
There is more to come from construction and regeneration firm Morgan Sindall (1,370p). The market capitalisation of online fast-fashion firm Asos came within a whisker of M&S this summer buy (5,814p). A market sell-off in structural-steel specialist Severfield creates an opportunity to buy cheap (63p).
Shares
Investors are steering clear of engineer Molins because of its pension liabilities, but it is "swimming in cash" (139p). Shareholders in housebuilder MJ Gleeson have just been rewarded with a big dividend hike (659p). Half-year results at gaming technology supplier Quixant are a signal to keep buying (425p).
Lighting-accessories manufacturer Luceco has made its first acquisition (237.5p). Waste-management group Biffa has fixed its financial problems (228.75p). Builder and civil engineer Kier is insulated from its peers' problems (1,167p). Online-shopping startup Attraqt should turn its first-ever profit this year (45.25p).
The Times
Long-term health trends are working in ConvaTec's favour (270.25p). Buy CityFibre to get exposure to the race to roll out fibre-optic broadband nationwide (40p). Ryanair's flight-cancellation mess has made a good stock cheaper (€16.36).
IPO watch
Uber's arch-rival Lyft is edging closer to an initial public offering that could happen as early as next year, reports Reuters. The ride-hailing firm is about to hire an IPO advisory firm to work with it on a potential flotation. Lyft was valued at $7.5bn in its latest fundraising, compared with $68bn for Uber. The firm passed $1bn in gross bookings in the second quarter, about one-eighth the amount of Uber, but is growing quicker and reportedly losing less than $100m per quarter.
Uber lost over six times as much in the second quarter. Lyft, which only operates in America so far, is now considering expanding overseas. It has also struck agreements with automakers and technology companies such as Ford, Tata Motors and Alphabet to test self-driving vehicles in its network.
A Swedish view
Shares in direct-selling cosmetics company Oriflame have fallen by around 30% in six months, says Affrsvrlden. Investors have been worried that the firm, which is heavily exposed to emerging markets, would struggle as these economies developed and regular retail channels grew up. But traditional retailers are being challenged by online shopping while Oriflame's model which relies on the personal tips of its network of agents works well on social media.
Sales are growing in Asia and Turkey and those in eastern Europe are recovering after several bad years. Debt is low, margins should improve and cash flow is solid. On a p/e of 14 times forecast 2018 earnings, the stock looks cheap especially given a 5.4% regular dividend yield and the chance of extra dividends this year.
