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
Today’s release of The Lion King remake should provide a welcome boost to this boutique cinema provider. In contrast to the mainstream “multiplex monsters”, Everyman venues have just four screens at most, with the focus on providing comfy seats, “proper food” and wine and cocktails served in glasses. The chain should more than double in size over the coming years. Investors need not fear a downturn: cinema attendance rises when the economy is doing badly. The shares are a bargain. 171p
The Daily Telegraph
RHI Magnesita is the world-leader in refractories, a product used to line blast furnaces. Intense heat and corrosive substances mean that these materials need to be replaced regularly, making for a steady stream of business. RHI Magnesita sells to customers in more than 100 countries and its scale gives it significant pricing power. This is a cyclical stock, but on 8.7 times earnings the shares offer value. 4,628p
As Britain’s largest logistics company, Wincanton was a prime beneficiary of the stockpiling frenzy ahead of the planned Brexit date at the end of March. The firm has been winning new contracts with the likes of the Co-op, HMRC and Weetabix, with the focus on consumer staples ensuring steady business even during a downturn. On less than eight times 2020 forecast earnings, the shares are considerably cheaper than those of peers, while renewed stockpiling ahead of the October Brexit deadline could provide another catalyst. 261p
Three to sell
Premier Asset Management
The Sunday Times
This Aim-listed asset manager’s multi-asset funds, which invest in stocks, bonds, commodities and property, are popular with financial advisers. Yet it suffered net outflows of £55m in assets under management in the final quarter of last year. Its Optimum Income fund has underperformed the FTSE-All share over the last five years and fees in the industry are coming under intense pressure. “It is hard to see light at the end of the tunnel.” Sell. 189p
De La Rue
Two hundred years of printing banknotes has not prepared De La Rue well for the era of digital payments. Debit-card usage surpassed cash in 2017 and some talk of a “cashless society”. The Basingstoke-based firm says it wants to become a more “technology-led security product and services provider”. Yet almost 80% of revenue still comes from the currency division. Management has announced a new plan to save money, but cost-cutting “will only get you so far if the fundamental issues remain unresolved”. 298p
This Scotland-headquartered transport provider operates buses and rail in the UK and the Greyhound coach network and school buses in the US. Multiple operations make for an unwieldly behemoth: it employs 100,000 people and is under pressure from activist investors. Management intends to split the group up. However, disposals are likely to be piecemeal and painstaking as the bus division’s “onerous pension liabilities” could put off buyers. The “road ahead has plenty of potholes”. Avoid. 103.5p
…and the rest
Payment-security specialist Eckoh stands to gain from increasing concerns about data regulation and privacy (48p). Three-quarters of the retail accounts on spread-betting platform CMC Markets lose money. Tighter regulation leaves investors on the wrong side of the bet too. (95.5p).
The Mail on Sunday
Investors in sports-nutrition specialist Science in Sport have “every right to feel aggrieved” after five years in which the shares have struggled. But profitability is finally in sight. Don’t “give up now”. 63p
Small-cap firms are likely to be hit worst by a disruptive Brexit, but globally-focused Aveva Group, Keywords Studios and Moneysupermarket.com should prove “nimble and adaptive” (3,906p; 1,706p; 417p).
Polar Capital Technology Trust is one way to gain exposure to a sector that is transforming our world (1,352p). Accelerating net new customer growth at satellite internet provider Bigblu Broadband shows that it is tapping an underserved market (108p). At a time when many old income stalwarts are disappointing, multi-utility supplier Telecom Plus remains a “solid growth and income play” (1,394p).
Ocado boasts an “unrivalled” know-how of online supermarket logistics and fees from international partnership deals should start rolling in soon – buy (1,140p). Shares in luxury handbag maker Mulberry have lost nearly 60% of their value over the past 12 months and the travails of the UK retail sector mean that there is little upside in view. Avoid (266.5p).
A German view
With looser global monetary policy set to ensure that interest rates remain negative or barely positive, gold is on a roll. Gold miners are a geared bet on the yellow metal. Sales rise with a higher gold price, while reserves are worth more too. One to consider is Canada’s Agnico Eagle Mines, says WirtschaftsWoche. It owns nine mines in Canada, Mexico and Finland, all stable countries unlikely to question the group’s property rights. Agnico’s 22 million ounces of reserves have a mineral reserve grade (the concentration of the gold in the ore) of 2.7, compared with an industry average of 1.1. It costs the group $836 an ounce to get its gold out of the ground, while it sells for over $1,400.
This month’s flotation of up to $9.8bn shares in the Asian division of Anheuser-Busch InBev, the world’s biggest brewer, had been expected to become the biggest initial public offering (IPO) of the year, eclipsing Uber. But late last week it shelved the deal shortly before it had been due to set a final price. It appears to have been setting its sights too high . The indicative share-price range implied an overall valuation of $54bn-$63bn, but banks had reportedly struggled to drum up demand, says the Financial Times; some analysts reckon the firm is worth just $45bn to $55bn. It contains a burgeoning Chinese business and a more mature Australian and Korean one.