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
Impax Asset Management
The UK market has been buffeted by political uncertainty, but small, agile companies can sometimes be less affected by macro factors than their more lumbering large-cap brethren. One such is environmental and sustainability investment manager Impax, which is profiting from a rising appetite for exposure to more ethical investments. Assets under management have swelled from £6.7bn to £11.8bn over the past year, with the share price rising by more than 114% in the same time frame. 223p
The Sunday Telegraph
Mondi produces cardboard boxes, carrier bags, toilet paper, wet wipes and 1.6 million tons of A4 paper every year in 30 countries. Currency swings hit sales last autumn, but a €500m special dividend in March and strong half-year figures last month have since reassured the market. The rise of e-commerce constitutes a huge structural growth story for packaging makers, while Mondi also offers exposure to emerging markets. The shares trade on a slight premium to their peers, but that should not deter investors. 2,145p
The legalisation of the US sports-betting market means big opportunities for this online gambling business. Sportech provides technology for gaming companies and sports teams. It already owns and operates gaming venues and sports bars across the US and possesses a licence in Connecticut, giving it a head start on the competition. Income seekers may be deterred by the absence of a dividend, but this could be a business worth betting on. 63p
Three to sell
The Daily Telegraph
Card Factory's latest trading alert has exhausted investors' patience with the struggling retailer. Management has shaved 4% off profit forecasts, blaming everything from the weather and weak consumer confidence to margin pressure for the slip-up. A special dividend still looks safe, ensuring a yield of more than 8% for the stock this year, but cash-flow cover for the dividends is getting tighter and any future threat to special dividends could undermine a major prop for the share price. It's time to bail out. 185.75p
Shares in this oilfield services provider dived 15 months ago when the Serious Fraud Office (SFO) opened an investigation into allegations of bribery, corruption and money laundering. Despite the controversy, Petrofac has continued to win new business and the share price has since almost fully recovered. Yet this is no investment opportunity. First-half data on new orders suggest that "the company's management is running fast to barely stand still". Add in the ongoing SFO probe and the risks look too high. 651.75p
This transport technology business provides analytics that help rail operators cut capacity problems. It also provides infrastructure planners with technology-led insights into traffic. Both sides of the business report strong momentum, but growth in this sector can be unpredictable. And with the forward price-to-earnings multiple up to 27.6 after a 40% share-price gain in six months, this seems a good time to take some profits. 723p
...and the rest
The Daily Telegraph
Wealth manager Brooks Macdonald is a great business that probably won't stay cheap for long (1,870p). Power cords maker Volex offers excellent organic growth (82.5p).
Uranium stockpiler Yellow Cake is a low-risk bet on nuclear energy (252p). Labour's hostility towards public-private partnerships should be bad news for infrastructure operator John Laing, but rising profits suggest the worries are overdone (315p). Demand for quality office space is growing in Germany, supporting a 5.5% forward dividend yieldat Sirius Real Estate (57p).
Lower life expectancy is boosting profits at life insurer Legal & General (257.25p). TV and film rights business Entertainment One (365.75p) is well placed to meet demand for new content. Retail is struggling, but merchandise discounter B&M European Value Retail is flourishing from the convenience retail trend (409.25p). Syncona's portfolio of healthcare companies offers exposure to emerging cell and gene therapies (264.75p).
Artificial intelligence will cut a swathe through multiple sectors in the coming decades. You can gain exposure through Ocado, IP Group and Seeing Machines (1,069.5p; 126.75p; 9.25p). With directors taking profits after a good run at paving-slab business Marshalls, only "a brave investor" would buy now (451.25p). An Australian merger is good news for Vodafone, but doesn't do enough to change the bearish outlook (167.5p).
A Swiss view
When it comes to our four-legged friends, we spare no expense, says Finanz und Wirtschaft. So it's no wonder Europe's pet-care market is steadily expanding. Last year it was worth around €26bn, up from €23bn in 2913. This bodes well for Zooplus, a Munich-based online retailer of pet supplies ranging from cat litter to bird cages. The group, which operates in 30 countries,made a loss between January and June owing to spending on a new distribution centre in Britain. But sales rose by 24% to €643m. Management expects sales to reach €2bn by 2020, helped by a repeat purchase rate of 94%. The number of new customers rose by 16% in the first half. This small-cap stock is well worth a look.
Britain's biggest peer-to-peer lender, FundingCircle, plans to raise £300m in an initial public offering (IPO) in London, which could value the firm at more than £1.5bn. The listing would provide a test of investors' appetite for the new breed of fintech companies that aim to challenge high-street banks, says the Financial Times. Since its launch in 2010, FundingCircle has seen 80,000 investors lend more than £5bn to 50,000 small businesses in the UK, the US, Germany and the Netherlands, including some £1bn in the first half of this year. Last year the company's net loss narrowed from £46.6m in 2016 to £35.3m, while revenues increased from £50.9m to £94.5m.