Two to buy
Vestas
Pernod Ricard
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(The Times) France’s Pernod Ricard is the world’s second-biggest drinks group behind Diageo. Activist investor Elliott Advisors had been pressing it to merge with a large rival to improve operating margins, but CEO Alexandre Ricard – whose family hold 14.2% of shares and 20.1% of the voting rights – gave the idea “short shrift”. However, he is following a policy of “bolt-on acquisitions” and improving margins is part of his plan. Despite Covid-19 and a €999m writedown (largely due to Absolut Vodka, which relies on airport sales), it has increased its market share while profits have fallen less than expected. €142
Two to sell
J Sainsbury
(Investors Chronicle) The supermarket group had steadied the ship after the pricey failed merger with Asda, but the pandemic has brought new problems, notably a squeeze on margins amid a shift towards less profitable online sales and large potential losses at its bank. The balance sheet remains “stretched”. The shares are inexpensive, but the growing army of short-sellers is right to sense “a value trap”. 213p
FirstGroup
(The Times) “There is... no case for investing in a UK public transport stock.” This train and bus operator has not paid a dividend since 2013 and is struggling to cope with its debt load. And don’t count on matters improving. The sale of its US operations, first announced in March, will produce little money and Britain’s semi-privatised railway system looks likely to be scrapped. Bus systems need massive investment. Avoid. 50p
...and the rest
The Daily Telegraph
Aviva’s new CEO Amanda Blanc aims to reform the underperforming insurance giant. Its “decent digital capability” and strong balance sheet bode well. Covid-19-related claims may inflate premiums. Buy (274p). Cable-assemblies maker Volex “has put its house in order and profits have responded”. Hold (189p).
Investors Chronicle
Derwent London “was one of the few commercial property groups to increase its dividend in the wake of Covid-19”. A solid balance sheet allows it to shrug off “short-term pain on rent collection”. Buy (310p).
Shares
Inspecs, an Aim-listed eyewear-frame maker, offers an appealing “growth story”. People will be rushing to catch up on eye appointments now that lockdown has lifted and there are still 2.6 billion people worldwide who need their vision corrected. Buy (230p).
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Leading European companies offer long-term growthOpinion Alexander Darwall, lead portfolio manager, European Opportunities Trust, picks three European companies where he'd put his money
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How to harness the power of dividendsDividends went out of style in the pandemic. It’s great to see them back, says Rupert Hargreaves
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Leading European companies offer long-term growth prospects
Opinion Alexander Darwall, lead portfolio manager, European Opportunities Trust, picks three European companies where he'd put his money
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How to harness the power of dividends
Dividends went out of style in the pandemic. It’s great to see them back, says Rupert Hargreaves
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Why Trustpilot is a stock to watch for exposure to the e-commerce marketTrustpilot has built a defensible position in one of the most critical areas of the internet: the infrastructure of trust, says Jamie Ward
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Tetragon Financial: An exotic investment trust producing stellar returnsTetragon Financial has performed very well, but it won't appeal to most investors – there are clear reasons for the huge discount, says Rupert Hargreaves
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How to capitalise on the pessimism around Britain's stock marketOpinion There was little in the Budget to prop up Britain's stock market, but opportunities are hiding in plain sight. Investors should take advantage while they can
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London claims victory in the Brexit warsOpinion JPMorgan Chase's decision to build a new headquarters in London is a huge vote of confidence and a sign that the City will remain Europe's key financial hub
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Reinventing the high street – how to invest in the retailers driving the changeThe high street brands that can make shopping and leisure an enjoyable experience will thrive, says Maryam Cockar
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The consequences of the Autumn Budget – and what it means for the UK economyOpinion A directionless and floundering government has ducked the hard choices at the Autumn Budget, says Simon Wilson
