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
(The Sunday Times) This Aim-listed drug developer is one of only a handful of drug firms on London’s junior market that “already has a product on the market”: Alkindi, a treatment for adrenal insufficiency. The firm is now conducting early stage trials of another drug, Ditest, a possible treatment for hypogonadism that has “blockbuster potential”. The business is likely to remain loss-making until 2023, but Diurnal “looks like a winner”. Buy. 63p
(Interactive Investor) This litigation-finance business has shrugged off attacks from short-sellers to deliver capital gains to shareholders. Burford’s financial statements are difficult to parse: “it is impossible to be sure” of the “underlying value” of undecided legal cases. That remains a concern, but there is “genuine scope” for growth. All the disruption of the pandemic should see a spike in business litigation, meaning more work for Burford. The shares are in “a new bull phase”, so buy. 700p
JP Morgan Japanese Investment Trust
(The Mail on Sunday) Long-suffering investors in Japan know that the Nikkei 225 index is still lower today than it was in 1991. Yet fewer than “one in 15” of Japan’s 3,500 listed companies are included in the index and there are many “hidden jewels” in what remains a relatively under-researched market. TJP Morgan Japanese Investment Trust, the biggest “dedicated Japanese fund on the London market”, tries to find them. It has grown at an annualised 14.5% in the past seven years, comfortably beating the wider Japanese market. “There should be more” to come. 640p
Three to sell
(The Sunday Telegraph) This temporary power-supply specialist could become the FTSE’s latest victim of the “greening” trend. Aggreko draws a fifth of its revenue from the oil and gas industry, but needs to shift its focus towards the energies of the future. There are real opportunities in providing “backup to solar and wind-power generation”, but turning that idea into profit will prove a challenging task. The share price has slumped over the past eight years and investors should wait for tangible signs of progress before buying in. “Avoid”. 440p
(Investors Chronicle) There is no doubt that Apple boasts a world-leading brand and superb business fundamentals. Yet with the shares on more than 30 times forecast earnings (twice the five-year average), those advantages are already in the price. A legal battle with App store supplier Epic Games cast doubt on a crucial revenue stream, while trade-war disruption is a serious threat to Apple’s supply chain and business model. The risks look tilted to the downside for investors. Sell. $115
(Shares) Shares in this gold miner have fallen about a quarter this month after “ground movement” prompted the closure of a section of its Sukari mine in Egypt. Lower production comes at an unfortunate time given the rallying gold price. Sukari is Centamin’s only mine, leaving the firm poorly diversified. Investors should monitor the situation for news, but in the meantime the prudent thing is to “take profits”. 151p
...and the rest
The Daily Telegraph
Biotech MaxCyte’s gene-editing technology sounds like the stuff of “science fiction”. Management is intent on an “invest to grow” approach that fits better in the US than the UK market, so it may eventually move the listing over to the Nasdaq. Buy (370p). Online casino 888 has had a good pandemic. Momentum is “building nicely” in Europe and the US, but the stock is fully valued. Hold (254p).
FTSE-250 firm Diploma is one of a select group of industrial businesses that boast “high-margins” and defensive characteristics. The shares are pricy, but new acquisitions have enhanced the long-term outlook. Buy (2,200p).
The Mail on Sunday
Sheffield-based video games developer Sumo Group has a “rich pipeline” and is expanding in America. The shares have soared of late. Existing investors should hold; new ones may wish to “snap up a few” (260p).
Zara and Bershka owner Inditex is a Spanish success story that boasts good margins and solid finances. It is available at a Covid-19 discount (€24). Share-price weakness is an opportunity to buy into soft drinks maker AG Barr. Trading has been robust this year, proving that it is a high-quality business with a “iconic brands”. Buy (469p).
The online food market has doubled since March and Ocado has cashed in on the trend. Yet legal action from Autostore in Norway, which claims patent infringement, has knocked the shares. There could be turbulence ahead. Take profits (2,438p).