Three to buy
Bunzl
(The Sunday Telegraph) This distributor often flies under the radar, but its deliveries of medical equipment, cleaning kit and disposable cutlery were vital to keeping the economy going during lockdown. First-half underlying sales grew by 5% Profit margins are expected to expand. Management “prudently cancelled” the dividend but a robust balance sheet suggests that the payout drought will be short. Bunzl will also be keen to resume its usual hunt for “bolt-on” acquisitions. 2,198p
Knights
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
(Shares) Lockdowns have disrupted the traditional legal partnership model, creating new opportunities for this legal and professional services business to lure high-flying lawyers into the fold. Specialising in corporate and commercial law, and boasting about 18,000 clients, Knights looks set to emerge from the downturn in a relatively strong position thanks to cash-saving measures such as deferred spending and staff salary cuts. Expansion into regional legal markets has brought greater diversification and leaves room for further growth. Buy. 398p
Roche
(Investors Chronicle) This “Swiss healthcare giant” is at the forefront of the battle against Covid-19 thanks to its diagnostic and antibody tests. It is also examining six different treatments for the disease “across 28 clinical trials”. The group also boasts a promising drug pipeline of non-Covid treatments, the fruit of research and development spending equivalent to 11% of revenue last year. A dependable 3% forward dividend yield is also attractive. CHF327.50
Three to sell
Hammerson
(Motley Fool UK) The pandemic has left this shopping-centre owner scrambling for cash. Rent collection in the current quarter sits at over 30%, leaving Hammerson to turn to the government for a loan that will only increase leverage. The shares fell again this week when it confirmed that it is looking to raise more funds through a rights issue. The group was already struggling before the virus struck and the future of bricks-and-mortar retail is deeply uncertain. The shares are cheap because the firm could “follow Intu into administration”. Avoid. 58p
ITV
(The Sunday Times) A proposed government ban on junk food advertising before the watershed is more bad news for the TV industry. Advertising at ITV halved “overnight” when the virus struck despite higher viewership, with severe disruption to the production of programmes. This summer’s schedule is thus full of repeats. Its new Britbox streaming venture is entering a fiercely competitive market. The shares have slumped by 60% this year but still aren’t a bargain. Avoid. 57p
Microsoft
(Interactive Investor) This “tech star” has led the market rally, gaining 60% over three months to hit an all-time high last month. Microsoft’s cloud-computing services are a natural winner from the rise of distance-working. But the tech rally may be overdone. Apple, Amazon and Microsoft now make up one-third of the Nasdaq 100 index, while a rating of more than 35 times earnings leaves Microsoft vulnerable to all but perfect news. Take profits. $203
...and the rest
The Daily Telegraph
Real estate investment trust AEW UK Reit shows that unglamorous property – past investments include a Belfast retail park and regional industrial units – often produce better returns. It offers an 11% dividend yield with “no prospect” of a cut. Buy (73p).
Investors Chronicle
Computer services firm Computacenter has been a big winner from the new demand for remote-working. Highly cash-generative and with zero net debt, the stock looks a bargain on a forward price/earnings multiple of 18 (1,942p). Topps Tiles is expanding in the commercial market and government efforts to juice the property market, which will mean more renovations, provide an extra fillip. Buy (43p).
The Mail on Sunday
Fantasy game store Games Workshop has grown into a “£3bn behemoth” worth more than Marks & Spencer.Lockdown has re-acquainted many people with the pleasures of an “evening-in” with a board game but the shares are pricy, so “buy on weakness” (8,780p). The world will be “elbow deep in Dettol” for the foreseeable future, so hold consumer goods giant Reckitt Benckiser (7,706p).
Shares
Shares in The Coca-Cola Company have lagged the wider rally, presenting a rare opportunity to buy into a “defensive colossus” ($48.48).
The Times
Catering giant Compass is languishing amid the slow global recovery. This high-quality operator will one day thrive, but “not yet”. Avoid (1,069p).
-
What happens if you can’t pay your tax bill, and what is "Time to Pay"?Millions are due to file their tax return this Friday as the self-assessment deadline closes. Though the nightmare is not over until you pay the taxman what you owe - or face a penalty. But what happens if you can't afford to pay HMRC your tax bill, and what is "Time to Pay"?
-
What does Rachel Reeves’s plan for growth mean for UK investors?Rachel Reeves says she is going “further and faster” to kickstart the UK economy, but investors are unlikely to be persuaded
-
How to find quality and profitability in financial companiesOpinion Julian Cane, manager of the CT UK Capital & Income Trust, picks three financial companies that drive cash flow, dividends and asset value
-
Luxury stocks rally after Richemont sales boom – is there hope for the sector?Cartier owner Richemont’s robust results have boosted sentiment about luxury stocks – but are investors getting carried away?
-
Transformed companies displaying momentum and top-quality growthAlex Savvides, manager of Jupiter UK Dynamic Equity Fund, highlights three companies as he tells us where he'd put his money
-
Should you add Straumann Holding to your portfolio?Straumann Holding is a global leader in the premium dental-care market
-
What’s the outlook for the shipping industry in 2025?All we know for certain about the year ahead is that it will be volatile. But the container shipping sector thrives on choppy waters
-
How to find top-quality companies with sustainable and growing dividendsIan Mortimer, portfolio manager of Guinness Global Equity Income Fund, shares where he would put his money for sustainable and growing dividends
-
Why Wise could be worth a lot more than its share price impliesForeign-exchange transfer service Wise has the potential to become the Amazon of its sector – here's why you should consider buying this stock now
-
Can The Gym Group pump up your portfolio?Gym Group was one of the best UK small-cap stocks in 2024 and will beef up your profits this New Year
