Three to buy
Arena Events
Shares
This small-cap firm provides equipment to run shows and sports events, counting Wimbledon, the Chelsea Flower Show and the US PGA among its clients. It boasts high recurring revenues and is eyeing new acquisitions in North America. A growing music and cultural scene in Asia and the Middle East are further growth opportunities and will let the firm avoid becoming overly dependent on a few clients.Buy for a "slow but steady increase in revenue and profit" and a 3% dividend yield. 59p
Daifuku
Money Observer
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With the days of ultra-cheap Chinese labour coming to an end, manufacturers in the the country are keen to automate their production processes to make them more efficient. That means rapidly rising order books for the likes of Daifuku, a leading Japanese robotics specialist. The firm saw sales growth of about 100% last year, with healthy earnings growth forecast for the year ahead. Beijing sees automation as a key way of boosting the quality of Chinese wares, leading to a "flurry of state funding" for robotics. 6,680
G4S
The Sunday Telegraph
The Carillion crisis has been a painful reckoning for the outsourcing industry. G4S is the original "contract cocker-upper", famous for failing to recruit enough guards for the 2012 Olympics. Yet those problems forced the group to get its act together, and today it is a leaner and more profitable operation than peers. G4S is a controversial pick, but with the shares yielding 4%, judged "on a purely financial basis" it is worth buying. 261p
Three to sell
BT
Investors Chronicle
It is almost a wonder that BT shares have "only halved" in the last two years. An Italian accounting scandal, a competition investigation into its Openreach subsidiary and a widening pension deficit have heaped woe upon woe for the telecoms firm. Turning around a "lumbering giant" with operations in 180 countries is not easy and management may ultimately be forced to cut the dividend or sell off a division to steady the ship. 226.5p
Saga
The Sunday Times
Shares in the over-50s specialist crashed 25% following a profit warning in December 2017 and have yet to recover. Saga has been trying to shift its motor-insurance operation to a more capital-light business model. The new strategy has brought unexpected difficulties, with intense competition necessitating more advertising spending. Management is pinning its hopes on a new membership scheme, but it is targeting the demanding baby-boomer demographic. Investors will need patience. 119.25p
Vodafone
The Daily Telegraph
Fans of the global telecoms giant say that weakness in the UK is offset by the firm's strength in overseas markets and point to an attractive 6.5% dividend yield as a reason to hold the shares. Yet with upcoming licence renewals and fiercer competition in Germany, Italy and the Netherlands, the business could be forced to "spend to defend" its market share. Add in cash-flow pressure resulting from the putative purchase of Liberty Global's European cable assets and dividend growth could disappoint down the line. 203.5p
And the rest
The Daily Telegraph
The recent auction for Premier League broadcast rights will see Sky paying £200m less than before (1,103p). Magazine publisher Future offers the "investment holy grail" of organic growth, improving profit margins and scope for acquisitions (382p). Lloyds Banking Group is on the mend, but negative sentiment from the financial crisis makes it undervalued (69.18p).
Investors Chronicle
Explorer SolGold may be yet to generate any revenue, butit has found a "world-class" copper-gold deposit in Ecuador (23p). The video-games market is expanding and games makers are outsourcing more than ever all positive trends for Keywords Studios (1,526p). New data-protection regulations are an irritation for most businesses, but they are likely to keep competition at bay for consumer-credit monitoring firm Experian (1,558p).
Shares
Global sweeteners giant Tate & Lyle offers a 5% dividend yield (568p). Deep-fat fryer specialist Filta remains a top small-cap pick as it moves into continental Europe (172p). Consumer health and hygiene titan Reckitt Benckiser had a disappointing 2017, but growth in emerging markets promises better news this year (5,908p). Shares in housebuilder Galliford Try have tumbled amid a capital raising, but investors should keep backing its long-term prospects (878p).
The Times
Shares in Dunelm have been volatile in recent years, but the homeware retailer's acquisition of e-commerce focused WorldStores should bring growth (578.5p).
A German view
Emerging-market borrowers often take out loans in dollars, so a rising greenback tends to squeeze finances there. Switzerland's Swatch, which sells watches and jewellery (brands include Omega and Harry Winston in addition to the signature plastic watches), has consequently struggled during the dollar bull market. But with the greenback drifting lower, the outlook has improved: 2017 saw a 27% jump in the bottom line to CHF755m. Mid- and basic-range brands, notably Tissot, Swatch and Flik Flak, have gained market share, successfully resisting the advent of hip smart watches, notes WirtschaftsWoche. A pristine balance sheet, meanwhile, should help the group ride out any state-induced slowdowns in China.
IPO watch
Online data-storage firm Dropbox officially filed for an initial public offering in the US last week. The firm wants to raise $500m from investors in what is likely to be the largest tech float since Snap went public in March last year. Dropbox was founded in 2007 and was last valued at $10bn during a fundraising in 2014. In 2017 the firm generated revenues of $1.1bn, up 30% compared with 2016, which helped narrow its net losses of $210m to $112m. The company has 500 million registered users, of which 100 million signed up since the start of 2017, and is generating about $112 in average revenue per paid user.
