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
Africa’s youthful population, rapid growth and “swelling ranks of affluent consumers” give it vast economic potential. Yet it remains difficult for investors to gain direct exposure to the continent. This telecoms group operates in 14 African countries. Nigeria is its most important market and Airtel also has scope to expand into liberalising states such as Ethiopia. On just 8.9 times forecast earnings the shares look a bargain for investors “prepared to think longer term”. 67p
The £140m purchase of TI Media, the owner of Marie Claire UK and Country Life, could prove a catalyst for further share-price upside at this FTSE 250 publisher. Disruption in the publishing industry means that many established titles can be snapped up relatively cheaply and CEO Zillah Byng-Thorne has proved adept at using e-commerce, digital advertising and retail partnerships to generate new revenue streams. The shares are up 1,700% since she took over in 2014, but they should still have “further to run”. 1,420p
The Mail on Sunday
Founded in 2016 when oil prices were falling, RockRose Energy has a straightforward strategy: it buys cheap North Sea oil and gas assets and spends money on improving their “productivity, efficiency and life expectancy”. That distinguishes it from riskier, exploration-focused peers. It is now pumping more than 20,000 barrels of oil equivalent per day and is turning a profit. On a near-5% dividend yield, this is a buy. 1,735p
Three to sell
Shares in this oil and gas services business have more than halved since last year’s highs due to weakness in America’s onshore oil and gas sector. The shale boom is slowing down and consolidation by oil majors will reduce Hunting’s pricing power. Management has been doing the right things by seeking new revenue streams and investing in new capacity, but the business is still dangerously exposed to the pain in US onshore. High fixed costs in the industry mean that profits take a big hit during downturns. Sell. 438p
This agriculture-to-engineering business operates in a wide array of sectors. Trouble in cyclical aerospace and energy markets means that almost all the group’s earnings are currently coming from the agriculture division. Yet weakness in global tea prices is a reminder that farming is a “notoriously temperamental” industry “beset by changeable weather, price volatility and labour issues”. With earnings forecast to remain depressed, there is little to get excited about here. Sell. 9,250p
The Sunday Times
This “engineering empire” now has operations across 36 countries and makes “everything from products used in brain surgery to wind turbines”. Yet the firm is painfully exposed to the global downturn and has issued three profit warnings since March. Profits in the latest quarter slumped from £32.6m to just £4.3m. Even if Trump does a trade deal it will “take a long time before Renishaw feels any benefit”. Avoid. 3,938p
…and the rest
An aggressive turnaround plan is bearing fruit at Wm Morrisons supermarkets. An attractive dividend yield and a partnership with Amazon that has generated takeover speculation round out the investment case nicely (199p).
Pacific Horizon Investment Trust offers one way to tap into Asia’s “enormous long-run growth potential” (321p). A difficult trading environment means that it is time to take profits in casual dining business Restaurant Group (139.75p). Pet retail is a “resilient niche”, so keep buying Pets at Home (205.5p). Strong third-quarter results reinforce our confidence in serviced office specialist IWG (400p).
The Daily Telegraph
Value is coming back into fashion, so now could be a good time to buy into Temple Bar Investment Trust, which boasts a low annual charge and has raised its dividend for 35 consecutive years (1,326p). Firms that turn university research into moneymaking intellectual property are out of favour in the wake of the Neil Woodford debacle, but contrarians may spy opportunity with IP Group (58.25p). Hold real estate investment trust Workspace – it is growing fast despite the wider London property gloom and could be in for a post-election pick-up (1,094p).
Banknote printer De La Rue looks set to lose out from the shift to cashless payments, while boardroom turmoil has shaken investors’ confidence. Avoid (169p). Don’t be distracted by eye-watering losses from Vodafone’s failed Indian venture. Revenue is growing again and a €20bn spin-off of its mobile-phone towers will shore up the balance sheet (166p).
A German view
Japan’s Panasonic has been struggling of late, says WirtschaftsWoche. Lacklustre sales in its core consumer electronics division (where cameras and televisions are key products) have depressed the stock. But on a price/sales ratio (see page 16) of just 0.3 and a yield of 3%, most of the bad news appears priced in, while Panasonic is dabbling in some promising areas. It is the key supplier of batteries for electric vehicles to Tesla and it has now agreed to produce car batteries with Toyota. The hydrogen fuel-cells business also looks auspicious. Panasonic makes fuel cells for houses and will supply much of the Olympic Village at next year’s Tokyo Games with cells too.
Saudi Aramco has scaled back the valuation of its initial public offering (IPO) amid underwhelming international demand, say Bloomberg’s Matthew Martin and Javier Blas. The latest price tag on Saudi Arabia’s state-owned oil giant— between $1.6trn and $1.71trn — is well below Crown Prince Mohammed bin Salman’s original goal of $2trn. Plans for international marketing have also been scrapped. International investors are concerned about the shift away from oil owing to the “strengthening global movement against climate change”. Saudi Aramco is nonetheless still set to overtake Apple Inc. as the world’s biggest public company.