Six to buy
Accrol Group
(The Mail on Sunday) Toilet paper (or the lack of it) has been one of the unlikely symbols of 2020. This Lancashire-based maker of supermarket own-brand kitchen roll and loo paper increased output by 40% early in 2020 to cope with the spike in demand. Profits look set to leap this year as a result, while in the longer term steady growth in demand could come from budget-conscious consumers switching to its products. There has been no dividend following a bumpy period after 2016, but management hopes to reinstate payouts “as soon as practically possible”. 52p
discoverIE
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(Shares) Once a “simple distributor” of electrical widgets, this engineer is evolving into a producer of higher-margin custom-made products. That means things like “blade controls” for wind turbines and sensor and power systems for the aerospace industry. Such “bespoke” work is harder for competitors to imitate and there is repeat demand from customers needing replacements. Very strong cash generation gives discoverIE scope to expand overseas and the firm could yet become a takeover target in its own right. 600p
Dixons Carphone
(The Sunday Telegraph) The “Dixons” part of this business is in “fine fettle”, but “the second half is a disaster”; the troubled Carphone Warehouse closed all 531 of its standalone stores earlier this year. That has kept investors away. Yet Dixons, which sells electronics and home appliances, has a bigger slice of the UK and Irish electronics market than Amazon and that proportion has actually grown in recent years. It is also strong in the Nordic countries. “Misunderstood and undervalued,” the shares have ample room to rise. 102p
Pets at Home
(The Sunday Times) This pet chain, which boasts 451 UK shops and an online presence, is “emerging from the pandemic wagging its tail”. Pets at Home supplements low-margin sales of kibble with more lucrative in-store “vet practices and grooming salons”. A September trading update brought news of double-digit sales growth thanks to a lockdown-induced pet ownership boom. A strong online performance and a move to expand in Greater London, where it is underrepresented, make the shares worth buying even on a price/earnings (p/e) ratio of more than 25. 376p
Photo-Me International
(Interactive Investor) Business at this operator of photo booths and other instant service machines was severely affected by this year’s closure of travel hubs and shopping centres, where many of its machines are located. The group is attempting to diversify away from photography into areas such as laundry and drinks vending, but these efforts have yet to prove fruitful. Still, CEO and founder Serge Crasnianski has upped his stake to 27.8% over the past year, a sign of confidence. The group is well diversified geographically across Europe and Asia. The risks are high, but on a “two-year view” speculators could see some upside from here. 56p
S4 Capital
(Investors Chronicle) The creation of former WPP boss Sir Martin Sorrell, this digital-advertising specialist is expanding fast, with five mergers in 2020 alone. The group is active in first-party data and targeted advertisements, a savvy move in a field where data analysis is growing more important. It’s been a tricky year for advertisers, but the market is bullish: the shares have rocketed 165% since the start of 2020. They aren’t cheap, but this is a buy for growth investors. 534p
...and the rest
The Daily Telegraph
Song-royalty investor Hipgnosis Songs Fund provides “utility-like income” and diversification against some of the market risks affecting other asset classes. Hold (121p). US-listed Vertex Pharmaceuticals, which makes treatments for cystic fibrosis, offers steadier returns than many other biotechs ($229.83). A home-improvement boom is driving trading at builders’ merchant Grafton Group. An economic recovery in 2021 should keep things ticking along. Hold (844p).
The Mail on Sunday
This has been a banner year for e-commerce, with shares in online-shopping security firm GB Group up “nearly tenfold” since we tipped them in 2013. Those who have benefited should take some profits, but not sell out completely (886p).
Investors Chronicle
Debates about the future of the office have weighed on pan-European commercial property business CLS Holdings. Yet on a steep forward discount to net asset value (NAV)of 38% the gloom looks overdone. High rent collection rates and an auspicious outlook for the German office market mean all is not lost (215p).
Shares
Global growth-focused Monks Investment Trust boasts a “stellar” record: it has returned an annualised 25.8% over five years compared with 14.8% for its world benchmark. That justifies a 3.1% premium to (NAV). Buy (1,314p).
The Times
A structural shortage of homes in and around London will underpin returns at housebuilder Berkeley Group – buy (4,231p).
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A rebound in UK's commercial property – should you invest?UK commercial property's three-year bear market finally appears to be over, says Max King
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Investment opportunities in the world of Coca-ColaThere is far more to Coca-Cola than just one giant firm. The companies that bottle and distribute the ubiquitous soft drink are promising investments in their own right.
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Investment opportunities in the world of Coca-Cola
There is far more to Coca-Cola than just one giant firm. The companies that bottle and distribute the ubiquitous soft drink are promising investments in their own right.
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Streaming services are the new magic money tree for investors – but for how long?Opinion Streaming services are in full bloom and laden with profits, but beware – winter is coming, warns Matthew Lynn
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Trainline: a cheap cash machine for investorsOpinion Trainline’s shares have slumped owing to concerns about growth, but the sell-off seems overdone
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Look to British stocks to lead the charge as the Magnificent Seven falterOpinion Gervais Williams, fund manager, The Diverse Income Trust, picks three British stocks where he'd put his money
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'Pension funds shouldn't be pushed into private equity sector'Opinion The private-equity party is over, so don't push pension funds into the sector, says Merryn Somerset Webb.
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Greg Abel: Warren Buffett’s heir takes the throneGreg Abel is considered a safe pair of hands as he takes centre stage at Berkshire Hathaway. But he arrives after one of the hardest acts to follow in investment history, Warren Buffett. Can he thrive?
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Who will be the next Warren Buffett?Opinion There won’t be another Warren Buffett. Times have changed, and the opportunities are no longer there, says Matthew Lynn.
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Will Comstock crash – or soar?Opinion The upside for Comstock, a solar panel-recycling and biomass-refining group, dwarfs the downside, says Dominic Frisby.
