Three to buy
The Mail on Sunday
This Aim-listed conglomerate operates a diverse portfolio across pubs, property, and wholesale coffee. It also has interests in tech start-ups. The group’s pubs, which offer food and accommodation, are situated in affluent parts of southern England, with management planning to double the portfolio over the coming years. The highly profitable commercial property business, which is the largest division, should also continue to serve up “substantial growth”. This fingers-in-many-pies model can make Barkby difficult to understand, but the shares might prove an “exciting ride for the adventurous investor”. 29p
The Daily Telegraph
Last year brought turbulence for this budget airline. However, it is making increasingly savvy use of data to boost revenue, predict aircraft maintenance needs and find new routes. A recent move to start offsetting aircraft carbon emissions will go down well with ever-more climate-aware consumers. Still, the ongoing risk of a no-deal Brexit at the end of 2020 could bring renewed share-price volatility. It’s a “risky buy”. 1,353p
Once known as Danish Oil and Natural Gas Energy, this Copenhagen-listed business has sold off fossil-fuel assets and bet on offshore wind. Its 25% market share makes it the world leader in the field, with its wind farms generating DKK8.6bn (£990m) in profits during the first nine months of last year. Wind is emerging as a key part of global decarbonisation efforts and Ørsted’s first-mover advantage bodes well. DKK670
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Three to sell
This Aim-listed online trainer helps companies to improve their workforces’ skills. The shares have returned 80% since we recommended them in April last year, so this looks a good time to take profits. Others may prefer to wait for a trading update at the end of this month before selling. This is a good company, but the share-price surge has taken the 2020 price/earnings ratio up to more than 28. That makes the risk-reward balance unfavourable. 136p
A sudden re-rating was a welcome Christmas present for holders of this portfolio of niche science-based businesses. The share-price surged 120% in the ten months to last November as the market came to appreciate the case for this “disciplined acquirer of small but established businesses”. Its specialised work limits competition and ensures steady revenue. Yet the shares now trade on a heady multiple of 29 times profit, so take some profit off the table and redeploy the funds elsewhere. 5,380p
Although it’s best known for its election polling, politics accounts for less than 3% of this pollster’s revenues. It does, however, play an important role in raising awareness of the brand. Founded 20 years ago, YouGov operates on multiple continents, with clients paying to glean information and insights from the firm’s “panel” of eight million people. Its internet-based model is driving impressive growth, but the market has long since cottoned on to this story. The shares trade on a vertiginous 57 times forecast earnings and yield just 0.4%. Avoid. 655p
...and the rest
The Daily Telegraph
Antibody specialist Bioventix, whose products are used in blood-testing, operates in a heavily regulated industry that keeps competitors out. That means predictable profits and “very high returns on capital” (3,310p). Shares in warehouse developer Segro have risen 80% since 2017, but limited supply and strong demand thanks to the e-commerce boom should continue to drive returns. Buy (870p).
Hollywood Bowl, the UK’s largest ten-pin bowling operator, is reaping big returns from expansion and refurbishment efforts and is now moving into minigolf – keep buying (285p). An ongoing “dogfight” in the mortgage market has hit banks’ profits, but Secure Trust Bank has minimal exposure to the sector and a 5.8% forward dividend yield (1,600p).
Retailers’ Christmas trading updates confirm the ongoing strength of the trend towards online shopping, which is now gathering pace in continental Europe as well. Warehouse investment fund Tritax EuroBox offers exposure and is forecast to pay a 4.5% dividend yield (93p). Shares in catering hire and laundry firm Johnson Service Group have hit a ten-year high, but it is a “low-volatility growth stock” that is still worth buying (212p).
Online grocery deliverer Ocado is an investing phenomenon: a loss-making business that pays no dividend, but is valued at £9.3bn. Yet its present retail partnerships represent a huge profit opportunity and earnings will start to come in this year, so investors should keep buying (1,334p).
The Evening Standard’s share tips for 2020
So far, most challenger banks have largely proved a challenge for investors’ wallets, but OneSavings Bank’s loan book is growing strongly and its specialist loans reap high profit margins. Bank on a re-rating (417p). In a world where “a bonkers orange bloke is in charge of the world’s biggest economy”, it is a good time to get defensive, so buy precious metals miner Fresnillo (652p). Australian gold mining stock Perseus Mining is an even more speculative way to play gold (61p).
Ted Baker had a dreadful 2019, but the “quirky fashion brand” is a fundamentally sound business (411p). A favourable Ofcom ruling on the future of broadband clears up one source of uncertainty for BT, but the current bombed-out price does not reflect the improving outlook (197p). Buy into Arrow Global’s “butterfly-like” transformation from debt collector to fund manager (274p). Boutique cinema chain Everyman is “hardly a cheap treat”, but the consumer demand is there and the group is expanding. Several blockbusters over the coming months will provide an extra boost (202p).
Shares in British Gas-owner Centrica slumped 26% last year, but talk of higher energy prices is bullish for a business that still has operations in exploration and production (88p). “The world will always need oil,” so BP “seems like a solid punt” (497p).
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