Three to buy
International Biotechnology Trust
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(Investors Chronicle) Next is preparing for the future. The group has been cutting store numbers and shifting from the high street to cheaper out-of-town locations, as well as renegotiating rents with “embattled landlords”. The store estate complements the online operation – “about half” of online purchases are collected in store. Online sales overtook retail for the first time last year. On an “undemanding” 13 times earnings it is a buy. 6,254p
BT Group
(Motley Fool UK) At first blush, the 48% crash in BT’s share price this year was surprising. A telecoms company might be expected to be one of the winners from prolonged social distancing. The trouble is not BT’s business model but its balance sheet. A record of overly ambitious expansion yielded falling earnings and rising net debt, currently around £18bn. Yet new management is running a “tighter ship” and analysts are “cautiously optimistic”. With the shares on a mere six times forward earnings, those who buy a small stake may be pleasantly surprised. 102p
Three to sell
JD Wetherspoon
(Interactive Investor) This pub chain is heading for a “reality check”. With the shares on more than 30 times expected earnings for the year to 28 July 2021, there is “no leeway” for things to go wrong. Investors may be betting that Wetherspoons can increase its daytime food-marketing efforts in response to the latest Covid-19 restrictions. Yet some consumers will become more cautious about eating and drinking out in case they catch the virus and need to self-isolate. With few positive catalysts on the horizon the risks are weighted to the downside. 775p
Learning Technologies
(The Times) Software specialist Learning Technologies, whose offerings include compliance tests and training programmes for companies, has reported “a recent bounce in demand, which has restored confidence in the boardroom” and it is set to pay an interim dividend. The group looks well placed for the post-pandemic world, “which will require workers to acquire new skills”, and its foray into online education looks shrewd. But on 30 times forward earnings the auspicious outlook is already in the price. Avoid. 129p
Lloyds Banking Group
(Shares) Things have “gone horribly wrong” since we tipped Lloyds bank last December. We hoped that Boris Johnson’s re-election would make for a calmer 2020, but that was not to be. A tanking domestic economy, tumbling interest rates and never-ending Brexit uncertainty are a terrible cocktail for Britain’s banks. The shares are down 60% since then and talk that rates could go negative next year only suggests that further pain is in store, so sell. 24p
...and the rest
The Daily Telegraph
Supermarket tills will be ringing with the pounds diverted from pubs and restaurants, so hold onto Supermarket Income Reit (109p).
Investors Chronicle
Aviva has disappointed of late, but the insurer boasts surplus capital and a strong brand. Buy (292p).
The Mail on Sunday
Aim-listed rare diseases specialist Amryt Pharma is making money and this summer’s listing on the Nasdaq has raised its profile in the US. Existing shareholders should maintain most of their stake, and new investors “may fancy a punt” (195p).
Shares
World-leading concrete-levelling specialist Somero Enterprises is a top-quality company, yet the shares trade on just 10.9 times earnings. Buy (260p). Music royalty investor Hipgnosis Songs Fund is expanding its catalogue and the upcoming revaluation of its assets could provide a further boost (119p). Premier Inn-owner Whitbread has axed 6,000 jobs. The business traveller market looks particularly unlikely to revive for the foreseeable future, so sell (2,070p).
The Times
Scottish broadcaster STV has been reaching more audiences during lockdown and advertising spending is improving after plunging earlier this year. It might prove a takeover target, so buy (250p). National Grid is a dependable business that pays an attractive 5.7% dividend yield (850p). Trading at paving and landscaping supplier Marshalls fell by 50% in the spring. But it has recovered sharply and the group should benefit from the shift towards DIY. Buy (645p).
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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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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
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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
