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
(Shares) This credit-hire and legal services firm could be an “Aim star in the making”. After motoring accidents, Anexo steps in to provide replacement- hire vehicles. Bond Turner, its legal side, deals with personal injury and negligence claims, among others, and is currently involved in a class-action case against Volkswagen over vehicle emissions. Cashflow remained resilient during lockdown, enabling Anexo to continue paying a dividend. Analyst Andrew Simms of Arden thinks the shares could more than double from here thanks to a growing market share and more investment in the legal division. 132p
(Interactive Investor) This fishing-tackle supplier seems to be enjoying a pandemic boost as Britons turn to solitary, staycation-friendly sports. Revenue rose by 21% in the six months to 31 July despite the long closure of stores, with online traffic surging by 54%. Trading on the continent has also surged. There could be plenty of upside to come should this prove the start of a new trend. 60p
(The Mail on Sunday) This Vancouver-based mining company is cashing in on copper as prices trade around a two-year high. The group has one site in production, with one more due to come online soon, as well as four other prospects. The outlook for copper remains buoyant: governments are using infrastructure projects to stimulate the economy, supporting metals demand. On the supply side, Chilean and Peruvian output has also been constrained by the virus. The shares offer a way for British investors to play structural demand for the essential industrial metal. 65p
Three to sell
(Investors Chronicle) The UK housing market has been enjoying a surprise post-lockdown surge, but developers still expect lower prices later this year. This FTSE 250 housebuilder is among the most vulnerable because of its low operating margins. It remains exposed to the weak London market despite an ongoing effort to shift into regional, affordable housing. The shares are on a steep discount to forecast net asset value but bargain hunters should steer clear: two inventory write-downs since last November mark a worrying pattern. The short sellers are circling. 191p
(The Sunday Times) In spring 2019 co-founder Julian Dunkerton seized back control of this struggling clothing business with the help of activist investors, vowing to revamp a “misguided strategy”. Yet since then the stock has declined by three-quarters. The pandemic has depressed trading but the brand’s reliance on “department stores and city centres”, the result of over-expansion in the good times, raises longer-term questions. A £57.8m cash pile may provide a temporary buffer, but it won’t cover losses forever. Avoid the shares. 135p
(Motley Fool UK) Shares in this small biotech have soared 38-fold this year on hopes for its SNG001 treatment in the fight against Covid-19. Positive trials are encouraging but SNG001 still has further clinical hurdles to clear. The group may also be forced to turn to a pharmaceutical giant to scale up production and distribution. Potential partners are likely to demand a handsome cut of the revenue, so the valuation looks optimistic. Avoid. 231p
....and the rest
The Daily Telegraph
Improving the economy’s energy efficiency is becoming a key priority for governments and businesses. Industry-leading Irish insulation specialist Kingspan is well-placed to profit from the trend (€64.60). Catalytic converter maker Johnson Matthey will lose out from the rise of electric vehicles, but its investments in battery technology and hydrogen mean investors should not unplug just yet. Hold (2,295p). IP Group helps commercialise the innovations of British academics. Such early-stage investments are risky, but the portfolio is diversified and a 32% discount to net asset value is a further comfort. Hold (74p).
Buy into growth in the climate-friendly hydrogen business via industrial-gas specialist Linde ($248). The pandemic has not lifted all healthcare boats, with shares in surgical-products specialist Advanced Medical Solutions tumbling due to the widespread cancellation of elective surgeries. Yet sentiment should improve when business returns to normal, so take the opportunity to buy in (215p).
The Mail on Sunday
More people are cooking at home, generating new business for Cranswick, one of Britain’s leading pork producers. Dividends have increased annually for the past three decades. Shareholders may wish to cash in some of their profits but should keep “at least 50%” of their stake for the long term (3,768p).
Franco Manca pizza-owner Fulham Shore has had “two record weeks of trading” thanks to the restaurant-subsidy scheme and should emerge strongly from the crisis as rivals fall away. Buy (8.5p).