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

Renalytix AI

The Mail on Sunday

The travails of Neil Woodford's fund highlight the dangers of investing in early-stage healthcare businesses, but the sector still has promise. This Aim-listed group helps with early diagnosis of kidney disease, which affects more than 850 million people worldwide. Its KidneyIntelX diagnostic system uses a simple blood test to determine which patients are most at risk of developing advanced kidney problems. Revenues should soar in coming years and city brokers have "high hopes". 240p

Chemring

The Sunday Telegraph

This defence contractor produces countermeasures such as flares, decoys and "chaff" to help jet fighters evade detection. Its also offers cybersecurity and produces equipment to detect chemical, biological and explosive threats. A "heavyweight" management team boosted the order book by a third in the first half. Shareholders have been "put through the wringer" of late, but things are looking up. 170p

CYBG

The Sunday Times

Clydesdale and Yorkshire Banking Group is one of the few challengers to have made a dent in the banking sector. A "chunky" £61bn mortgage book gives it scale, which was enhanced by last year's £1.7bn acquisition of Virgin Money. The purchase of a well-known brand is a "huge boost" to efforts to draw in more customers. Integration risks and shrinking margins in the UK mortgage market are key risks, but with shares trading below book value and £150m in cost savings anticipated from the Virgin deal, this stock is a buy. 179p

Three to sell

Codemasters

Shares

Shares in this video games developer have surged almost 40% since the end of November but it is now time to take profits. A deal with Chinese giant NetEase has opened access to the Middle Kingdom's vast gaming market. Full-year revenue growth of 12% is impressive, but if you strip out the NetEase venture it becomes a pedestrian 3%. Recent good news is now in the price and, with the financial benefits unlikely to start flowing until 2020 or 2021, the "news vacuum" could cause share-price volatility. 251p

J Sainsbury

Investors Chronicle

The failure of Sainsbury's proposed deal with Asda has given the shares downward momentum. All of the big four supermarkets (the others are Asda, Tesco and Wm Morrison) have been losing market share to discounters Aldi and Lidl, but none more so than Sainsbury. Unfortunately, management has not responded to the failed merger plan with the required boldness and its determination to reduce debt levels will constrict capital expenditure, which will do nothing to reverse recent declines in market share and margins. 202p

Just Eat

The Times

Just Eat's share price has been "suffering a bout of indigestion". Amazon's investment in arch-rival Deliveroo has put the spotlight on ferocious competition in the sector. Just Eat has responded by offering steep discounts and investing in a new delivery network but this is a low-margin business and the final bill is uncertain. On 31.5 times forecast earnings and with no dividend the shares do not look appetising. 621p

...and the rest

The Daily Telegraph

Paris-listed cognac maker Rmy Cointreau has been around since 1724 and remains under family control. This recipe for longevity looks cheap (€119.80).

Investors Chronicle

Metrology specialist Renishaw has been hit by the slowdown in China but a strong balance sheet and high margins mark this out as a quality business buy (3,908p). Countryside Properties has been buffeted by souring sentiment towards housebuilders and a connection with Neil Woodford's Equity Income Fund, but with the shares on just seven times forward earnings there could be re-rating potential when the "shadow of Woodford lifts" (296.5p). Fewer contract wins and rising debt could drive housing services provider Mears Group towards a "tipping point" sell (255p).

Mail on Sunday

Wales-based Creo Medical is a pioneer in stomach cancer treatment. It is loss-making, but long-term prospects are bright (194p).

Shares

Fears of slower global growth have driven shares in cruise ship operator Carnival down too far. It is a high-quality operator that has delivered £7.6bn to shareholders through dividends and buybacks since 2014 buy (3,935p). News of record revenue and profit have sent shares in electronics equipment maker Halma to an all-time high buy on any dips (1,941p). Premium lifestyle brand Joules continues to "confound" retail sector doom and gloom and has exciting global growth potential (279p).

The Times

"Remarkable" sales figures from Gregg's show that investors underestimate the baker at their peril (2,234p).

A German view

Denmark's Ambu is a hidden gem, says Der Aktionaer. Few have heard of the 53-year-old company, but its products can be found in operating theatres around the world. Offerings range from face masks and breathing bags to endoscopes and electrodes used in electrocardiograms (ECGs). The long-term outlook for medical devices is encouraging and Ambu has just announced a record quarter: sales jumped by 14% to €105m as operating earnings reached €26m. The group's promising product pipeline includes new endoscopes, which should allow it to reach its sales target of 750,000 devices by the end of the year. A recent dip in the share price is a good buying opportunity for long-term investors.

IPO watch

Airtel, Africa's second-largest mobile network operator after MTN, will float in London at the end of June. The group will have a free float of at least 25% of the equity and the price range for the initial public offering (IPO) will be 80p-100p, implying a market capitalisation of £3bn-£3.6bn. That is the sort of market value associated with mid caps in the FTSE 250 Index. Airtel, which has its headquarters in the Netherlands, will list in Nigeria at the same time. The telecoms and mobile money transfer company operates in 14 African countries and has nearly 100 million subscribers. It is owned by India's Bharti Aitel International.

Recommended

Babcock International: a turnaround play in a growing sector
Share tips

Babcock International: a turnaround play in a growing sector

Britain’s defence spending is set to rise and Babcock International could soon return to favour, says David J Stevenson.
7 Jul 2022
Imperial Brands has an 8.3% dividend yield – but what’s the catch?
Share tips

Imperial Brands has an 8.3% dividend yield – but what’s the catch?

With an impressive dividend yield of 8.3%, Imperial Brands looks to be one of the most attractive income stocks in the FTSE 100 . But investors should…
6 Jul 2022
Can Royal Mail continue to deliver its 7.6% yield?
Share tips

Can Royal Mail continue to deliver its 7.6% yield?

Royal Mail shares are yielding 7.6% this year. But it’s facing some huge challenges, says Rupert Hargreaves. So is Royal Mail’s dividend sustainable?
6 Jul 2022
Saga’s figures are heading in the right direction – so should you buy?
Share tips

Saga’s figures are heading in the right direction – so should you buy?

Saga the over-50s travel and financial services specialist, has been struggling for years. But now, with the pandemic behind, it it is planning for fu…
5 Jul 2022

Most Popular

Is inflation about to drop as recession takes hold?
UK Economy

Is inflation about to drop as recession takes hold?

Central banks are raising interest rates in an attempt to curb soaring inflation. But will that push the economy into recession? John Stepek looks at …
5 Jul 2022
Ray Dalio’s shrewd $10bn bet on the collapse of European stocks
European stockmarkets

Ray Dalio’s shrewd $10bn bet on the collapse of European stocks

Ray Dalio’s Bridgewater hedge fund is putting its money on a collapse in European stocks. It’s likely to pay off, says Matthew Lynn.
3 Jul 2022
Is it OK to buy Scottish Mortgage investment trust again?
Investment trusts

Is it OK to buy Scottish Mortgage investment trust again?

Scottish Mortgage investment was hit hard by the tech-stock crash, and it is still being buffeted by headwinds. Should new investors wait for those to…
5 Jul 2022