Three to buy
Driver Group
(The Mail on Sunday) A “vanity skyscraper” project in the Gulf is over budget, an Australian offshore oil rig is months behind schedule. Who do you call? This building resolution specialist helps sort out the disputes that arise when complex infrastructure projects go awry. Founded 42 years ago, its consultants are known for their “smart, forensic” approach to establishing what went wrong and how to move forward. New government infrastructure plans should bring it plenty of new work in the years ahead. Buy. 63p
Volution
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(Shares) This ventilation products supplier is that rarest of things: a business well-positioned for the post-pandemic world trading at a reasonable price. A leading player in markets across northern Europe and New Zealand, Volution provides ventilation systems and ducts in commercial and residential settings. The virus has brought a heightened awareness of the importance of good indoor airflow and could prompt new regulations and retrofitting of existing systems. Trading remained resilient through lockdowns. On 12 times 2021 earnings and yielding 3%, the shares are a buy. 181p
(Motley Fool UK) Shares in Barclays are down by 36% this year. A dividend suspension and incoming loan losses hardly make for a rosy investment picture. Yet value indicators are flashing green. The shares trade on a price-to-book ratio of just 0.3, half the sector’s average. Barclays will eventually return to paying dividends, and the 2018 payout would yield 5.5% at the current price. The shares have fallen so far that they now offer a “wide margin of safety”. 118p
Three to sell
Royal Dutch Shell
(Investors Chronicle) When oil prices plunged below $30 a barrel earlier this year Shell slashed the dividend by two-thirds. Management also reduced capital expenditure and froze share buybacks. Shell risks becoming an unwanted collection of “stranded assets” as the economy de-carbonises, so it must invest heavily in “new energies”. Yet the oil price outlook remains shaky, depriving it of the funds it needs. The business can no longer afford the generous dividends that investors had come to expect, so sell. 1,234p
DS Smith
(The Daily Telegraph) We tipped this packaging firm in January because it seemed a cheap way to buy into the e-commerce boom, says Questor in The Daily Telegraph. Yet the Achilles’ heel of the investment case was always the £2.1bn net debt pile. Although the sale of DS Smith’s plastics division earlier this year raised funds it wasn’t enough. Management has axed dividends because of a slowdown in industrial demand, which was not made up for by the lockdown boom in online consumer shopping. With the payout gone it is time to move on. 288p
Liontrust Asset Management
(The Times) This fund manager has a strong position in the burgeoning ESG (environmental, social and governance standards) market. However, that also leaves it vulnerable to any setbacks for the sector, which some believe is overly reliant on “PR and imperfect methodologies”. Active fund managers generally are also under pressure on fees. On 21 times earnings, the shares are now “just too pricey”. Take profit. 1,400p
...and the rest
The Daily Telegraph
Many of the world’s best tech stocks are listed on US exchanges but it is still possible to buy in on the London market through investment trusts. Those wishing to top-up their tech holdings should take a look at Scottish Mortgage Investment Trust, Polar Capital Technology and Allianz Technology (899.5p; 2,120p; 2,350p). Shares in financial data business Euromoney have been punished because its events division is suffering from the coronavirus. Yet a strong balance sheet and solid core business mean it could beat expectations – buy (853p).
The Times
The pandemic has been a nightmare for London’s office owners, but the current bearishness looks overdone. Rent collection at Derwent London has proved resilient and the demand for “high-quality, flexible office space” is not going away. Buy (2,820p). PureTech, which offers anti-obesity treatments among others, has a promising drug pipeline. Buy (273p). Pub closures have been hard on beverage business C&C Group, whose brands include Magners cider, but the firm still looks a long-term winner – buy (241p).
Investors Chronicle
US biotech play Regeneron’s antibody expertise is being used in the fight against Covid-19 – a “speculative buy” ($622). Electricity generation investor ContourGlobal offers reliable cashflow in “these tumultuous times” (190p).
The Mail on Sunday
Consumer-goods packaging maker Robinson has enjoyed a boost as consumers buy more food to eat at home and spend more on cleaning products. With a 5% yield the shares are a buy (109p).
Shares
Private equity investment trust 3i contains quality businesses with reliable cash flow. A solid long-term choice (824p).
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