Three to buy
(The Times) The company that can “deliver just about anything” has re-invented itself as an essential service during lockdowns. From e-commerce and subscription music to e-readers and the Alexa voice assistant, Amazon’s reach is vast. Most promising is its market-leading cloud-computing arm, Amazon Web Services, which delivers big profits and should enjoy another boost as companies switch to distance working. The stock may be on 91 times earnings, but it looks “unstoppable”. $2,408
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(The Mail on Sunday) Ireland is a hub for multinational businesses, with many based outside Dublin. Yew Grove’s founder Jonathan Laredo noticed that the provincial market was being underserved by Dublin-centric property firms. Today his Irish real-estate investment trust has a 27-property portfolio worth £100m. Many tenants work in pharmaceuticals or healthcare, giving Yew an edge in the current crisis: they all paid their rent “on time and in full” during the first quarter. That should enable it to continue paying out dividends. It’s a “solid, long-term investment”. €0.88
(Shares) This FTSE-250 emergency repairs business operates a membership model, which covers customers for gas, plumbing or electrical problems. That means high recurring revenue, which should insulate the company from any short-term pandemic hit. Homeserve has proved itself during previous downturns, growing its policy book through the financial crisis. It still has plenty of room to expand in America. 1,145p
Three to sell
(The Sunday Telegraph) This testing business is one of the less well-known FTSE 100 stocks, but it has been making “hay” in recent years. Complex quality assurance is a necessity as electrical equipment, clothing and food move from one part of a globalised supply chain to another. Yet now talk of post-virus “deglobalisation” abounds, with corporations likely to shift to simpler, more local supply chains. Margins could take four years to recover to 2019 levels. Avoid. 4,959p
Domino’s Pizza Group
(Investors Chronicle) Covid-19 is the least of this pizza franchise’s worries. Increased demand for home delivery should help it through the lockdown, but can’t solve existing problems. A bitter and long-running dispute with franchisees about new store openings and rising costs remains unresolved and is eroding key business relationships. The group is preparing to shrink its international operations after failed expansion attempts in Switzerland and several Nordic countries. Debt remains “manageable” for now, but has risen rapidly over the past five years. The shares “should be given a wide berth”. 283p
(The Daily Telegraph) Panic has subsided and some stocks have emerged as surprising winners. Business at the owner of the Jet2 airline and holidays business is “in hibernation”, but the shares have jumped by 75% in four weeks and are up 28% since we first tipped them in summer 2017. Such gains on a company where revenue is zero are “extraordinary”. The chance to sell an airline stock at any kind of profit is too good to miss. Take profits. 666p
...and the rest
The Daily Telegraph
Cruise operator Carnival has been hit hard and its focus on a holiday market favoured by older travellers may delay a return to normal trading. However, it has a decent cash buffer to tide it over so holding on for an eventual recovery seems the best bet (910p).
The Mail on Sunday
Mining royalties group Anglo Pacific is diversified enough to withstand the downturn in commodities markets and the dividend “looks pretty secure”. Existing investors should hold, while those looking for “sustained, long-term income” may also be interested at current levels (135p).
Strong pre-pandemic trading figures and the confirmation of its 2019 dividend make Tesco a share worth owning – buy (232p). Robust 2019 trading and minimal disruption so far from the coronavirus mean that we remain buyers of Aim-listed pharmaceuticals business Alliance Pharma (78p).
New management should help household goods giant Reckitt Benckiser better leverage its “exceptional collection of brands”. In the meantime, the group’s Dettol and Lysol cleaners have been “flying off the shelves” (6,168p). With the country in lockdown, motor insurance claims are likely to dip, which will be a fillip for the “highly cash-generative” Sabre Insurance (272p).
FTSE 250 merchant bank Close Brothers has joined peers in cutting its dividend, breaking a 35-year run. But its cautious, specialised lending leaves it better insulated than the big banks from a spike in bad loans. Hold (1,040p).
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