Share tips of the week
MoneyWeek's comprehensive guide to this week's share tips.
Three to buy
Hundreds of millions of Asians are set to move into the "middle class" bracket in the next few years. This demographic shift is driving growth for the Pru, which is the top private life-insurance provider in Malaysia, India, Indonesia and Cambodia. Prudential's dividends are less generous than peers Legal & General and Aviva, but payouts may increase and the shares are cheaper. 1,884.5p
The Mail on Sunday
Platinum producers have often viewed chrome as an "irritating byproduct", but this chrome and platinum group promises to "make your portfolio shine". Chrome is an essential component in stainless steel, used in everything from kitchen gadgets to medical equipment. Tharisa's diversification also makes it less dependent on the price of a single volatile commodity. The group listed in London in 2016 and looks set to deliver long-term growth as China drives a rise in demand for chrome. 121p
U and I
This property regeneration specialist, which works with local authorities to unlock land for development, is riding high after the £34m sale price of its Blackhorse Road site in London last year topped market expectations. Stockbroker Peel Hunt reckons that the company is trading at a 33% discount to net asset value, and there is a prospective yield of nearly 9% on offer. U and I is "one of the most compelling value opportunities in the property sector". 200p
Five to sell
Barratt, Persimmon and Taylor Wimpey
Shares in the big housebuilders have rebounded since the Brexit referendum, but investors are "getting jittery again". Solid trading updates have been met with share-price falls. The reason? The rate of UK house-price growth has more than halved over the last year. The sector's defenders point out that prices are stagnating rather than falling, and that developers still enjoy the support of the government's help-to-buy scheme. But with signs of a tougher market threatening margins, the housebuilders look overvalued.617p; 2,648p; 196.5p
Followers of the outsourcing sector may wonder whether Interserve could be "Carillion in disguise", but management argues that Interserve is a sound business. Chief executive Debbie White has identified £50m of cost savings, but "few game plans survive contact with the enemy". Interserve is "in business with a public sector with no money and no strategic direction". 119p
Jupiter Fund Management
Strong markets and currency movements have helped Jupiter to break through the £50bn mark for assets under management. However, performance was "rather muted" in the last three months of 2017. The business has been diversifying abroad, but remains exposed to UK conditions, where regulators are cracking down on fund managers' "traditionally fat fees". 584.25p
And the rest
The Daily Telegraph
Tobacco may be in decline, but the industry's big players have managed to remain profitable and Imperial Brands looks like a "steady Eddy stock" (3,173p). A share-price slump at funeral-services firm Dignity offers an opportunity for contrarian investors; it has cash for acquisitions (1,833p).
Overseas expansion makes clothing retailer Superdry a resilient choice (1,977p). A growing and ageing population means more business for healthcare landlord Primary Health Properties (115p). Tighter environmental regulations and a protective "moat" of patents makes specialist filtration group Porvair worth its premium (465p). Infrastructure services business Fulcrum boasts a growing order book and is also expanding into owning infrastructure assets (65p).
A £5m cash injection will enable online education provider Wey Education to deliver growth (38.5p). Support-services group G4S is back on track after a torrid 2017 (286p). Innovation management specialist Sopheon has increased 36.4% since Shares' tip in June (450p). Veterinary products play Dechra Pharmaceuticals is rolling out an impressive drugs pipeline (2,058p).
Americans are smoking less, but British American Tobacco will benefit from the US tax cut and has a record of "coughing up chunky dividends" (4,959.5p).
British car maker Aston Martin is considering an initial public offering, targeting a valuation of as much as £5bn, says Bloomberg. Investors' interest in a flotation could be strengthened by the planned expansion into sport utility vehicles next year, when the manufacturer expects to start building the DBX SUV. The firm surpassed 5,000 deliveries last year for the first time since 2008 and now expects to exceed its 2017 guidance of £180m in earnings before interest, tax, depreciation and amortisation. Group sales may increase by 60% to 8,250 vehicles in 2020, says IHS Markit.
A German view
Investors are underestimating ElringKlinger, says German weekly WirtschaftsWoche. The struggling share price suggests the car-parts supplier remains dependent on the internal combustion engine. In fact, it is diversifying towards electric vehicles. A joint venture with China's Sichuan Chengfei to produce batteries will allow Elring to develop its battery and components business. An acquisition has given it expertise in hybrid and electric engines. Thanks to growing car sales, it also expects a 5% rise in sales this year and looks reasonably valued on a 2018 price/earnings ratio of 11.5.