Two to buy
CVS
(Investors Chronicle) Britain’s largest veterinary-services company operates more than 500 practices. Levels of pet ownership have risen steadily over the last ten years and “rocketed” under lockdown. The number of insured pets has risen too, which will “help to protect CVS’s income in an economic downturn”. The reopening of its small-animal sites has boosted sales. The forward price/earnings ratio of 23 does not fully reflect the company’s potential. 1,205p
DFS Furniture
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
(The Times) People forced by the pandemic to stay at home are “using their spare cash to make their homes and gardens... a bit smarter or... a bit more bearable”. That has bolstered the home-improvement sector. Sofa retailer DFS is a “post-lockdown winner”, with orders worth £70m in the six weeks since it reopened its stores. It is expected to make adjusted profits of £80m next year on sales of £1bn. 170p
Two to sell
Just Eat Takeaway
(The Times) “The world’s largest food delivery company outside China” did well out of Covid-19. Sales jumped by 44% in the first half, but pre-tax losses widened. They may widen further now that the firm is building its own distribution network to keep pace with Deliveroo and other rivals – an expensive undertaking, especially in the US. Just Eat should survive the industry’s “shakeout”, but the shares are overvalued given the “unappetising” outlook. Avoid. 8,706p
Micro Focus
(Investors Chronicle) Once Britain’s biggest technology group, this collector of software assets came unstuck in 2017 when it bought Hewlett Packard Enterprise’s software business. The move cost Micro Focus $8.8bn, doubling the debt load to three times its market capitalisation and triggering a goodwill impairment charge of $960m over three years. Competition is “fierce” and a recovery looks unlikely. Sell. 296p
...and the rest
Investors Chronicle
AB Dynamics, “a ‘one-stop testing shop’ for the global automotive industry”, is priced at a premium. But a strong predicted recovery and regulatory tailwinds make it worth buying (1,735p). Investment platform provider Nucleus Financial is a “decently priced growth stock” (130p).
The Daily Telegraph
Online gaming operator Gamesys has delivered on expectations and “there could be further gains to come”. Hold (£11.20). Matthew Dobbs, the manager of the Schroder AsiaPacific Fund, will be missed when he retires. “We will hold, but monitor progress” (491p).
Shares
Despite navigating the pandemic “impressively”, UP Global Sourcing, the consumer-brands firm behind Salter weighing scales, remains a bargain (94p). Hold on to shares in LED lighting company Luceco, even though they have “gone bananas” (187p).
-
Tesco braces for supermarket price war with rival AsdaTesco, Britain’s biggest grocer, has opted to cut its prices more quickly to prevent Asda grabbing market share
-
Supersonic travel: How China could 'leapfrog' US and Europe's commercial aviation industryOpinion Innovation in commercial aviation has been stuck for 60 years. A commercial supersonic jet might be back on the market soon, but will China get there first?
-
BP's 'long, painful decline' – and why next year could be even tougherOpinion Long-suffering shareholders in oil giant BP have been pushing for change. It won’t come soon enough, says Matthew Lynn
-
Investment trusts tap the profits in exotic and obscure global marketsOpinion Peter Walls, manager of the Unicorn Mastertrust fund, highlights three investment trusts as he shares where he'd put his money
-
The star small and mid-cap stocks income investors have overlookedOpinion Thomas Moore, senior investment director, Aberdeen, highlights three company stocks as he shares where he would put his money
-
Falling revenues and mounting debt spell trouble for Jumia TechnologiesStruggling African e-commerce platform Jumia Technologies looks headed for the exit, says Dr Matthew Partridge.
-
Chemring Group: an explosive investment opportunity in defenceEuropean states are raising their military spending, and Chemring Group looks well placed to profit
-
Next reports £1 billion in annual profits for the first time – what's next for the retailer?Clothing retailer Next has become only the fourth member of its sector to surpass £1 billion in annual profits. What does this mean for the company's future?
-
Best of British bargains: cash in on undervalued companies in the UK stock marketOpinion Michael Field, Chief Equity Market Strategist, EMEA, Morningstar, selects three attractive UK stocks where he'd put his money
-
Building firm Keller presents low debt and ample scope for growthGeotechnical contractor Keller, which supports vital global infrastructure, boasts rising profits and a cheap valuation
