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.

Three to buy

Oxford Metrics 

(Investors Chronicle) The once niche field of movement tracking is entering the mainstream as smartwatches and fitness trackers become more popular. Aim-traded Oxford Metrics is the world leader in “high-precision motion measurement analysis” through its Vicon division. There are opportunities in fields as varied as medicine, films and virtual reality. Even space agency Nasa is a client. A robust net cash position leaves Oxford Metrics well placed to grow through acquisitions. Strong forecast earnings growth and a varied client base make this a long-term buy. 109p

Polymetal International

(The Sunday Telegraph) FTSE 100 investors in search of a “counterweight” to the market slump don’t have many ways to gain exposure to the gold bounce. Russia and Kazakhstan-focused Polymetal is the index’s “only precious metals miner”. Underlying earnings increased 31% in 2019, thanks to disciplined cost control. Income investors will like the 5% yield and record of special dividends, while value investors will see a “margin of safety” with the shares trading on 13.2 times earnings. A miner exposed to Russia will always be high risk, but Polymetal could prove a safe haven during the Covid-19 pandemic. 1,220p

WH Smith

(The Sunday Times) A burgeoning travel business has set apart WH Smith from the woes of the wider high street in recent years, but now the coronavirus has ensured that last week it became the first retailer to issue a profit warning because of the outbreak. Yet with leverage at just 0.9 times underlying earnings and £109m of free cash flow last year, it is better placed than many to ride out the storm. The shares are a bargain” at this price. 1,119p

Three to sell

Cineworld

(Shares) This global cinema operator’s debt-financed takeover of Canada’s Cineplex couldn’t have come at a worse time. The deal takes gearing up to about four times EBITDA, a level that “statistically… significantly increases the chances of default”. Management had pledged to reduce leverage over the coming years, but the coronavirus is likely to deal a severe blow to cinema attendance as customers re-assess the appeal of “spending a couple of hours sitting next to complete strangers”. 89p

Premier Oil

(Motley Fool UK) It has been a miserable period for oil stocks in the wake of the Saudi-Russian price war. Smaller independent operators have been hardest hit. North Sea producer Premier Oil crashed 88% at one point last week before staging a rally last Friday, with management pointing to hedging strategies and plans to preserve cash flow by delaying investment. Yet the recovery could well prove a “dead cat bounce”. Oil may fall into the low $20/barrel range, which is too low for the firm comfortably to be able to service $2bn in net debt. It’s a “very risky share” best avoided. 13p

Trainline

(Investors Chronicle) This rail and coach ticketing platform was performing well in the UK and on the continent before Covid-19. A full-year trading update showed UK consumer revenue up 30% and the small international division saw 41% net growth in ticket sales. Yet with the travel market tanking and enormous uncertainty over how long quarantine restrictions will last, this is one to sit out. In the longer term, moreover, we are sceptical that Trainline has a “sustainable competitive advantage” that will keep earnings high. 348p

...and the rest

The Daily Telegraph

Specialist infrastructure supplier Hill & Smith, which produces galvanised road barriers and the like, has big opportunities in America and the opportunity to consolidate a fragmented market. Buy on weakness (1,310p)

Investors Chronicle

Defence engineer Chemring used to be an unpredictable investment, but significant restructuring and higher US defence spending mean that it is now best regarded as a reasonably priced defensive play (236p). A broad portfolio and stable revenue model have helped industrial royalties business Anglo Pacific hold its value better than most during the market sell-off. On a price-to-book ratio of 0.85 it offers long-term value (126p). Data specialist Experian, best known for consumer-credit scoring, is a long-term growth story with a strong market position across the UK, US and Latin America (2,470p)

The Mail on Sunday

Infection prevention specialist Tristel will have an important role to play in fighting Covid-19, while the epidemic may also mean stronger long-term demand for disinfectant products. Buy (445p). Shares in corporate trainer Learning Technologies are up sixfold in six years and the outbreak will prove a tailwind for its digital learning model (135p)

Shares

Royal Dutch Shell is now a buy for the brave. An 11% dividend yield would normally be a warning sign, but the company has not cut its dividend since World War II (1,347p). Social care and education services provider CareTech has growth opportunities in areas that appear insulated from the virus fallout. Buy (435p).

Recommended

Changpeng Zhao: Binance founder undaunted by the crypto winter
Bitcoin & crypto

Changpeng Zhao: Binance founder undaunted by the crypto winter

Changpeng Zhao, the founder of controversial cryptocurrency exchange Binance, has been severely battered by carnage in the sector. But the future is b…
3 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
Just how powerful is artificial intelligence becoming?
Tech stocks

Just how powerful is artificial intelligence becoming?

An uncannily human response from an artificial intelligence program sparked a minor panic last month. But just how powerful are machines getting – and…
2 Jul 2022
Persimmon yields 12.3%, but can you trust the company to deliver?
Share tips

Persimmon yields 12.3%, but can you trust the company to deliver?

With a dividend yield of 12.3%, Persimmon looks like a highly attractive prospect for income investors. But that sort of yield can also indicate compa…
1 Jul 2022

Most Popular

Five dividend stocks to beat inflation
Share tips

Five dividend stocks to beat inflation

During periods of high inflation, dividend stocks tend to do better than the wider market. Here, Rupert Hargreaves pick five dividend stocks for incom…
30 Jun 2022
Don’t try to time the bottom – start buying good companies now
Investment strategy

Don’t try to time the bottom – start buying good companies now

Markets are having a rough time, so you may be tempted to wait to try to call the bottom and pick up some bargains. But that would be a mistake, says …
1 Jul 2022
UK house prices are definitely cooling off – but are they heading for a fall?
House prices

UK house prices are definitely cooling off – but are they heading for a fall?

UK house prices hit a fresh high in June, but as interest rates start to rise, the market is cooling John Stepek assesses just how much of an effect h…
30 Jun 2022