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.
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
Manchester United
The Daily Telegraph
Football is a huge global business, yet surprisingly few clubs are listed on the stock exchange. New York-quoted Manchester United is the most valuable of the listed teams, with a market capitalisation of $3.4bn (£2.8bn). Yet that price does not adequately reflect the club's huge global following or immense value to live broadcasters, with investor Nick Train among those to spy substantial upside. Worth a light-hearted punt, but don't sink in serious cash. $22.10
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Yellow Cake
The Mail on Sunday
Yellow Cake takes its name from a term for powdered uranium oxide, which is used to make nuclear reactor fuel. The firm has a simple business model: buy uranium oxide, store it and sell when the price goes up. It has been buying up millions of pounds of the stuff at rock-bottom prices, and the yellow-cake market could now be set for a long overdue rebound as China increases nuclear capacity and Japan restarts power generation. A "low-risk way" to get exposure to a potential turn in the commodities cycle. 225.25p
Secure Trust Bank
The Times
Few banks have "done more to prepare for the apocalypse" than Secure Trust. The firm closed its subprime lending unit last year and has cut back its unsecured loan operation to reduce risk. The decision to forego money-making opportunities has hurt the share price, yet half-year figures show that the renewed caution hasn't precluded healthy profits. A potential 4% dividend yield adds to this cheap stock's appeal. 1,630p
Three to sell
Caledonia Mining
Investors Chronicle
This African gold miner has reported a "worrying bump" in costs as labour and equipment prices rise. The hit was offset by higher sales prices for the yellow metal in the first half, but unexpectedly low production has cast doubt on the group's goal of increasing gold output from 59,000 ounces this year to 80,000 ounces by 2021. The setback provides an opportunity to take profits after a decent share-price run. 645p
Computacenter
Shares
This FTSE 250 IT business ships more than 25.5 million products every year and then provides customers with support, saving businesses from hiring expensive in-house IT teams. Computacenter is a reliable even dull source of earnings growth that has offered investors impressive total returns. However, the business still struggles to shake off the impression that it is a low-margin hardware seller and, with the current price-to-earnings ratio north of 21, the shares look fully valued. 1,566p
Majestic Wine
The Sunday Times
Majestic has "tiptoed" around carnage elsewhere in the retail sector in recent months, boasting growing underlying profits and falling debt. The online Naked Wines operation, which grew sales by 11.3% last year, has made up for sluggish growth in the 210-store estate. Now boss Rowan Gormley wants to scale the Naked Wines membership model across the company, but that could prove difficult in a retail business that has to compete with cheap supermarket alcohol. An uncomfortable hangover could be in store. Avoid. 415p
and the rest
The Daily Telegraph
The UK Commercial Property Reit offers investors a 4.2% dividend yield as management puts more emphasis on the growing area of logistics warehousing (88.25p).
Investors Chronicle
Aviva is boosting dividend payouts and trades at a discount to peers (496.5p). A 31% drop in the share price of Mexican precious metals giant Fresnillo this year looks like a buying opportunity (993p). An improving margin and revenue outlook make education tech supplier RM look tempting (224p). Microsoft is a leader in the fast-growing cloud sector and has a strong balance sheet ($108).
Shares
Growth and income investors should buy into Applegreen on news that it will buy motorway service operator Welcome Break (538p). The summer's heatwave may have given Majestic Wine a sales boost, while overseas growth is also promising (433.5p). If data is the new currency, then credit checker Experian could prove a treasure trove (1,869p). Trading at kettle controls business Strix is ticking along nicely (171.25p).
The Times
Half-year revenues have plunged at public-service contractor and construction group Interserve, and its finances remain precarious (70p). Head hunter PageGroup has been diversifying overseas to hedge against Brexit risk (596.5p).
The Mail on Sunday
Investors should find out how a hot summer has affected sales before buying into Domino's Pizza (297p). Biotech firm Arix Bioscience looks cheap and has just made its first investment in Australia (173.5p).
A German view
Shares in Austria's Palfinger have declined by a third over the past few months as it has taken longer than expected to digest a recent acquisition, says WirtschaftsWoche. But the worry is overdone. The group makes hydraulic lifting and loading systems, and specialises in a variety of cranes used in the agricultural, marine and railway sectors.
The core division, encompassing recycling, construction and forestry, is enjoying robust demand, while the smaller marine business looks promising. Its products include cranes for offshore drilling platforms; exploration should increase along with the oil-price rise. Sales are expected to hit a record €1.6bn next year.
IPO watch
Bitmain, the world's largest cryptocurrency-mining chip maker, is planning to go public in Hong Kong in the next few months, says CoinDesk. If the firm raises the hoped $18bn at a market capitalisation of $40bn-$50bn, it will be one of the largest listings on record.
Bitmain has hitherto focused on producing integrated circuit chips used to "mine" cryptocurrencies such as bitcoin with algorithms. But it has also recently begun to make chip hardware for the artificial-intelligence industry. Since its foundation five years ago, Bitmain has become one of the world's most valuable cryptocurrency businesses. In the first half of 2018 it raked in $2.5bn in revenue, says Bloomberg.
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