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 Mail on Sunday
Rising oil prices mean brighter prospects for small energy firms. President Energy has struggled in recent years, but rising production in Latin America over the past 18 months has “transformed” the business into a profitable operation. It produces about 3,000 barrels of oil per day and that figure should rise to 10,000 by 2021. An Argentina-focused oil explorer will always be risky, but more adventurous investors may spy a bargain at the current price. 7p
This Aim-listed training platform provider offers e-learning applications to 2,000 companies and government departments. Burgeoning regulation is driving rapid growth in the corporate e-learning market as firms adapt to new red tape. The company has ample scope to cross-sell more services to its clients and half of sales stem from recurring contracts. Its 2019 price/earnings (p/e) ratio of 9.5 is too cheap given the upside. 75p
The Sunday Telegraph
This hedge-fund manager ended its 17-year-long sponsorship of the Man Booker Prize this year and is writing “a new chapter” of its own. The rise of passive index trackers has rocked the industry, but Man’s diversified range of products may help fend off the margin erosion experienced by more traditional fund houses. Analysts expect annual earnings growth of 17% over the next five years, while the recent bullish turn in stockmarkets can only help. At ten times next year’s earnings, these shares are “worth tucking away”. 157p
Three to sell
The Daily Telegraph
Shares in this global shipping-services specialist have jumped by 30% since December. The group has much to recommend it, including cash on the balance sheet and a track record of 16 consecutive increases in the annual dividend. Yet with global valuations stretched – Clarksons’ shares trade on 21 times 2019 earnings – high ratings are at risk if global trade stalls. It is only a year since the group’s last profit warning “badly holed the shares”. Take profits. 2,370p
Shares in this online estate agent have fallen by two-thirds in the past 12 months owing to rising costs and uncertainty over Brexit. The group has been spending heavily to grow market share both at home and overseas. But housing-market weakness in Britain and Australia has prompted a sales warning. With no dividend and the cash pile “dwindling”, there is “no reason” to own the shares. 122.5p
The Daily Telegraph
We had high hopes for this pharmaceutical business and its opioid addiction treatment, but things have gone spectacularly wrong. In April the US Department of Justice charged the company with “engaging in an illicit” scheme to increase prescriptions of an earlier version of the drug by “deceiving healthcare providers” about the true benefits of the treatment. If it loses in court then it could be fined up to $3bn, which will put its future in grave doubt. “This stock has been a disaster… We must admit to our mistake and sell.” 43p
…and the rest
Electronic sensors and connectivity products maker TT Electronics offers exposure to the nascent Internet of Things (IoT) sector, in which everyday household objects are linked to computers (242p). Young & Co’s focus on premium pubs will insulate it from the cost pressures afflicting the wider industry (1,685p). The current share-price dip at conference call and online meeting software provider LoopUp offers an entry point into a business geared towards an important workplace trend (325p).
The Mail on Sunday
City Pub Group has bucked negative trends in the hospitality industry to deliver strong growth. A little profit taking after a 35% gain in 14 months is understandable, but brokers remain bullish (228p).
Aberdeen Asian Income Fund is significantly cheaper than its peers and offers an appealing 4.2% yield (216.5p). Identity data intelligence specialist GB Group has reported unexpectedly good revenue and profit growth and the outlook is auspicious as ever more retail spending moves online (606p). Two new acquisitions by electronics engineer discoverIE confirm a shift into higher margin products (434p).
Aim-listed Boku, which enables payments to be made from mobile phones, is growing fast (120.5p). Home emergency repairs business Homeserve is growing strongly in the US (1,144p). Hill & Smith, which produces the electronic signage notifying drivers of problems ahead, among other products, is well-placed to profit from increases in infrastructure and security spending (1,295p).
A German view
You may never have heard of Yandex, says German business weekly Der Aktionär, but it’s worth a look. The Russian equivalent of Google, Amazon and Uber, it offers a search engine – with more than 50% of the Russian market – and earns its money from online advertising. It also has an e-commerce platform, an online marketplace and ride-hailing app Yandex.Taxi, which, unlike Uber, is almost profitable. It has just produced its first smartphone, which costs a quarter of the price of an iPhone and offers a Siri-equivalent called Alice. Yandex has agreed a joint venture with Hyundai to develop autonomous car systems. As a whole it is worth just $11.5bn, an eighth of Google’s self-driving car division.
Global market jitters, the trade war and uncertainty over Brexit have undermined the initial public offerings (IPOs) market in Europe early this year. Only 32 companies listed in the first quarter of 2019, raising a collective €715m – the lowest quarterly IPO volume and value since 2009. London accounted for €557m of the total, while Brussels and Milan made up the top three. This month Zurich has been unusually busy, as Lisa Jucca notes on Breakingviews. Its political stability is a stark contrast to the chaos in the rest of Europe. Medical devices group Medacta and train manufacturer Stadler reached valuations of $1.9bn and $3.8bn respectively in their flotations.