Share tips of the week
MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
Three to buy
The Daily Telegraph
This firm's drugs treat addictions to opioids, which include substances such as heroin and painkillers. Indivior's products have evolved as a result of addicts abusing its opioid substitutes, and now include three delivery mechanisms: tablet, film and injection. The latter is the only one of its kind to have received approval by US regulators. With shares trading at 14.5 times forecast profits for 2018, Indivior is "one of the cheapest healthcare stocks", but is well placed to grow amid America's opioid addiction crisis. 401.5p
The clothing chain is a classic growth story. Underlying pre-tax profits are 90% ahead of where they stood at the time of its float in May 2016. Joules has a disciplined approach to store openings, while investments in online services and distribution leave it well placed to meet the demands of millennials. It is "riding an earnings upgrades wave", and increased forecasts twice in January. The amount of active online customers has grown by 55% over the past three years, outstripping store space expansion of 23%. 324p
The diamond-mining firm is on a roll. Shortly after announcing the $40m sale of the 910-carat Lesotho Legend, the fifth-largest gem-quality diamond ever recovered, it reported a new 169-carat discovery. Gem has made seven discoveries so far in 2018 above the 100-carat threshold, compared with seven during 2017. It has now stepped up marketing activities and has also begun a cost-cutting programme to improve business efficiency. 96.5p
Three to sell
Management at this building-materials manufacturer blamed winter weather for a profit warning that sent the shares diving 26%. It also cited delays in builders committing to new work and slowing construction output in the commercial new-build sector. Pre-tax profit for the year ending June 2018 is now likely to be 15% lower than expected. Despite this, Alumasc remains positive about overseas growth and recently acquired drainage business Wade. However, 87% of its revenues are still focused on the UK. 137p
The motor-services provider has come under further attack from short-sellers: institutional investors now have short positions amounting to at least 12.5% of its shares. Former executive chairman Bob McKenzie has filed a High Court claim against the group, citing wrongful dismissal following an altercation with another employee in August. The shares have also fallen significantly following a profit warning and the announcement of a cut in the 2018 and 2019 dividend. 80p
The outsourcer's chief executive Phil Bentley noted recently that the demise of Carillion has raised "fundamental questions" about the outsourcing industry, but asserted that Mitie's expertise and scale were still valued by clients. But the firm's recent performance has been "far from spotless". Operating profit and cash generation are expected to be down in the year to March 2018; net debt is set to rise by £50m-£70m. 159p
...and the rest
The Daily Telegraph
After five profit warnings, a dividend cut and two rights issues, defence and aerospace equipment supplier Cobham's turnaround appears to be on track (132.5p). Sweetener firm PureCircle trades on a lofty valuation with little margin for error, but has potential for long-term growth (427.5p).
Gateley, the UK's first listed law firm, is delivering on its promises of organic growth (168p). With a plethora of near-term catalysts and a solid long-term outlook, Hutchison China Meditech is a rarity in the biopharma world (5,200p). Take profits in Aim-listed oil and gas company President Energy, which has performed well over the past year (12p).
A string of distribution deals for software group Wandisco including one with Microsoft provide sales opportunities (785p). All-purpose pension firm Just Group has scope to grow (135.75p). Challenger bank OneSavings Bank trades at about two times its book value, lower than rivals (379p).
The Mail on Sunday
Join the Caribbean oil rush through Trinity Exploration and Production, which looks set to achieve healthy returns from its assets off the Trindadian coast (15.5p). Keep an eye on music-streaming service One Media IP Group two of the UK's best-known media titans, Ivan Dunleavy and Michael Grade, joined the board last year (9.5p).
Chief executive Chris How is leaving personal care and beauty products supplier Swallowfield after five years, but this still looks like an opportune time for investors to buy into a growing firm (335p).
An American view
Coca-Cola European Partners (CCE), the world's largest independent Coke bottler, has joined the European war on sugar, says Barron's. The firm has emphasised lower-sugar drinks such as Coca Cola Zero Sugar, fruit-flavoured ViO Bio and tea, and has reformulated its Fanta and Sprite brands in the UK to reduce their sugar content. Beverages with no or few calories now account for 35% of sales. That means further growth opportunities, as does the possibility of buying a controlling stake in Coca-Cola Beverage Africa from Coca-Cola, the US-listed firm that owns the master brands and holds 18% of CCE. The stock looks cheap given a p/e of 14 times forecast earnings, a yield of 3.1% and the prospect of share buybacks starting this year.
Chinese video-streaming platform iQiyi, a unit of search-engine firm Baidu, has launched an initial public offering (IPO) in the US that is set to raise up to $2.38bn, says Reuters. iQiyi expects to use about half of the proceeds to widen its range of content. The firm has around 50 million subscribers and over 420 million monthly active users on mobile devices. Last year, it became the first Chinese site to sign a licensing deal with Netflix, which has struggled to enter the Chinese market. In 2017, revenue jumped to RMB17.38bn (£1.96bn), a gain of 55% on the previous year but it still posted a net loss of RMB3.74bn, up from RMB3.07bn.