THREE TO BUY
Alphabet
The Daily TelegraphImagine if Google shut down. Journeys would be harder to plan, website searches would be less effective, and firms would find advertising more tricky. Google is so profitable because its customers depend on it. Most of its profits are ploughed back into the core business, which allows Google to maintain its competitive advantage while also delivering an excellent return on capital. This makes its US-listed parent, Alphabet, a compelling investment.$1,171
City Pub Group
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Investors ChronicleCity Pub Group owns 38 pubs across "high-footfall areas in London and affluent cathedral cities in the southeast". The pubs have a "hyper-local" feel and prioritise drink sales over lower-margin food. It floated on Aim last November, and the share price has not changed much since, but with cash for acquisitions, and an experienced management team, this is a "very exciting" play on the leisure sector.170p
Greencore
The TimesThe world's largest sandwich maker has been on a buying spree on both sides of the Atlantic. This growth has not come cheap, but debt levels should fall as it moves into the consolidation phase, with Donald Trump's tax cuts an added fillip for the US operation. The end of the mergers and acquisitions (M&A) spree means management can now focus on generating income for its shareholders. Buy following a pullback in the share price.198p
THREE TO SELL
IQE
The Sunday TimesThis semiconductor firm is starting to look like Britain's "next big tech thing". The share price quadrupled in 2017 amid rumours that its silicon wafers would be used in the next-generation iPhone. IQE has also attracted short-sellers, who think sales of Apple's iPhone X will disappoint, while one is questioning its circular relationship with two of its joint ventures.104.5p
Renishaw
SharesInvestors in Renishaw are scratching their heads. The group is a world-leading manufacturer of high-precision measurement kit, and its latest half-year results were impressive: 20% organic revenue growth and a 12% dividend increase. Yet its stock slumped by nearly 15% in a day as investors questioned a sky-high valuation. This is a "fantastic business", but an unpredictable one, with a habit of "surprising the market positively and negatively".4,912p
Royal MailInvestors ChronicleRoyal Mail has agreed a deal with unions to spend around £400m per year on pensions, in contrast to the £1bn figure management had feared. The share price has rebounded in recent months, but it still looks like a bad long-term investment. The number of letters sent is falling, while Royal Mail "faces the challenge of modernising its business" while "fending off increasing competition".502p
AND THE REST
The Daily Telegraph
Vimto maker Nichols is not "knock-down cheap", but patient investors should value its strong brands and healthy finances (1,532.5p).A pension deal means more money in the bank for Royal Mail, and its dividend looks "more sustainable" (470p).
Investors Chronicle
The market has been disappointed by Burberry's trading performance, but the weaker share price creates a buying opportunity (1,629p). This year could be good for silver, and Hochschild Mining offers exposure (232p).
Shares
"Fantastic little gem" K3 Capital is the UK leader in small-cap M&A advice and generates plenty of cash (224p). FTSE 250 constituent B&M European Value Retail is opening new stores in the UK and Germany as cash-strapped shoppers hunt for bargains (418p). A positive trading update shows software platform designer Sopheon still has momentum (574p). The weakening dollar is bad news for convenience food maker Greencore, but it remains a long-term investment (200p). An ageing population and stronger oil price are boons for United Arab Emirates-based private healthcare provider NMC Health (3,360p). Sterling's rebound reduces margin pressure at budget retailer Shoe Zone (165.75p).
The Times
A strong balance sheet at healthcare services group UDG Healthcare gives it power for acquisitions (794p). FTSE 250 housebuilder Countryside Properties stands to gain from government initiatives that promote affordable housing (328p).
A Singaporean view
Singapore-listed China Sunsine Chemical Holdings offers a cheap way to invest in rising demand for cars without the cyclicality that come with investing in carmakers, says The Edge Singapore. The firm is a leading producer of rubber additives used in car tyres. Demand for tyres tends to be more stable than new car sales because existing cars need replacement tyres even during an economic slowdown. China Sunshine's sales have grown at an average of 12% per year since 2011, helped by curbs on polluting competitors. The firm trades on 9.5 times earnings, has no debt and yields around 2%.
