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

Goldman Sachs Group

(Barron’s) While “Main Street” retail banks contend with shaky consumer confidence and ultra-low interest rates, the trading arms of investment banks help them to profit from loose monetary policy. Surging corporate debt issuance is good for the underwriting operation and merger activity may pick up later this year. Unpredictable earnings and the Malaysian 1MDB scandal remain problems, but the business appears well-placed to profit from the current market environment. $200

Harworth Group

(The Daily Telegraph) Struggling high streets and empty offices mean that real-estate companies are firmly out of fashion, but that has created some bargains. This land and property regeneration group trades on a reasonable 35% discount to net asset value. Harworth invests in about 100 residential, industrial and logistics sites across the north of England and the Midlands. That diversification should leave it well-placed however the post-pandemic future of work and e-commerce ultimately develops. 102p

Ultra Electronics

(The Sunday Telegraph) This military equipment maker is less well-known than some of its peers, but could be one to watch. Ultra Electronics makes equipment used in submarine detection, torpedoes and communications, hi-tech niches that are attracting strong US defence interest; America accounts for half of Ultra’s revenue. Rising geopolitical tensions are likely to keep global defence budgets robust. In uncertain times, defence is a reassuringly “defensive” play. Buy. 1,994p

Three to sell

Applegreen

(Shares) Shares magazine only tipped this forecourt operator at the start of the month, but reckons that it is already time to take profits. Shares in the Welcome Break-owner have gained more than 10%. While the group should benefit from more people coming back onto the roads and a “staycation boom” this summer, that has to be set against a €545m net debt position and the risk of a more prolonged pandemic slump. The recent gains may lead the risk-averse to conclude that balance between risk and reward is now less favourable. 340p

Cineworld

(Investors Chronicle) This cinema chain’s venues have been closed because of the pandemic, but that has not stopped it from serving up its own share of “drama”. Management agreed to buy Canadian peer Cineplex in a £1.8bn deal in late 2019, but is now backing out, citing “breaches” of the acquisition agreement. Cineplex plans to sue. The scrapping of the deal should free up much-needed cash, but with the outlook for the sector uncertain and a legal battle to add to the in-tray, investors should sell. 75p

Moneysupermarket.com

(The Times) With fewer people driving and home transactions stalled during lockdowns, fewer people are shopping around for a better insurance deal. A cooling of competition between banks in the loans and savings market has also hit the money side of the business. One bright spot is an increase in utility switching as people spend more time at home. This is one of the best price-comparison sites, but the climb back from the crisis could be a long one. Avoid. 325p

...and the rest

Investors Chronicle

Insurance-led fund manager M&G has struggled to shake off the impression that it is an unwanted cast-off from last year’s demerger from Prudential. Yet a generous dividend policy and big discount to sector peers more than make up for the underwhelming growth prospects. Buy (151p). The era of working from home is driving more spending on home improvements and boosting online business at DFS Furniture. Buy (177p). Record levels of Chinese steel consumption and falling global copper stockpiles are a tailwind for mining giant BHP Group. On a dividend yield of just over 3% it also pays an attractive income. Buy (3,633p). 

The Daily Telegraph

A focus on tech businesses has helped Monks Investment Trust consistently beat the FTSE 100. We think that the trust will keep up the good work despite a forthcoming change of management. Hold (1,010p)

Shares

Leading UK pawnbroker H&T Group is one business that should thrive if the downturn proves prolonged. What’s more, the shares trade on a “miserly” 6.5 times this year’s net profit. Buy (317p). US hospitals have never been under more pressure to run efficiently. That’s good news for Scottish hospital software group Craneware, which dominates this “exciting niche” (1,830p).

The Times 

A recent share-price retreat is a buying opportunity at intellectual property and translation specialist RWS Holdings. The group should prosper thanks to its clients in the buoyant science and technology sectors (593p).

Recommended

Hong Kong’s crown slips as Singapore takes over
Asian economy

Hong Kong’s crown slips as Singapore takes over

As international sentiment sours on Hong Kong, other Asian financial hubs – primarily Singapore – are snapping up business.
6 Jul 2022
Price of gas soars as Moscow turns off the taps
Gas

Price of gas soars as Moscow turns off the taps

As Russia cuts its gas exports to the EU, the price of natural gas continues to rise. Restricted supplies could see energy rationing and recession i…
6 Jul 2022
Low growth and high inflation: a toxic cocktail for anxious markets
Stockmarkets

Low growth and high inflation: a toxic cocktail for anxious markets

Low growth, high inflation, central bank tightening, a strong dollar, and the risk of recession is proving a toxic cocktail for world stockmarkets – a…
6 Jul 2022
How to cut the cost of childcare
Personal finance

How to cut the cost of childcare

Childcare is expensive, yet few people are drawing upon all the government support they are entitled to. Ruth Jackson-Kirby explains what help is avai…
6 Jul 2022

Most Popular

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
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
Is inflation about to drop as recession takes hold?
UK Economy

Is inflation about to drop as recession takes hold?

Central banks are raising interest rates in an attempt to curb soaring inflation. But will that push the economy into recession? John Stepek looks at …
5 Jul 2022