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.

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

(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)

Recommended

Oil is taking a well-earned rest. But the bull market isn’t done yet
Oil

Oil is taking a well-earned rest. But the bull market isn’t done yet

The oil price has more than doubled in the last five years. It’s come off the boil recently, but in the longer term, things are still looking good. Do…
28 Jul 2021
Why you should treat whole-life insurance policies with extreme caution
Personal finance

Why you should treat whole-life insurance policies with extreme caution

Whole-life insurance policies are often marketed to people in their 50s and over. But there are significant drawbacks and you could end up with nothin…
28 Jul 2021
I wish I knew what an index was, but I’m too embarrassed to ask
Too embarrassed to ask

I wish I knew what an index was, but I’m too embarrassed to ask

The FTSE 100 is probably the best-known stockmarket index in the UK. But what exactly is an index?
27 Jul 2021
What’s behind China’s stockmarket meltdown?
China stockmarkets

What’s behind China’s stockmarket meltdown?

Chinese stocks fell hard for a third consecutive session on Tuesday. Saloni Sardana explains what’s going on.
27 Jul 2021

Most Popular

The MoneyWeek Podcast: Asia, financial repression and the nature of capitalism
Economy

The MoneyWeek Podcast: Asia, financial repression and the nature of capitalism

Russell Napier talks to Merryn about financial repression – or "stealing money from old people slowly" – plus how Asian capitalism is taking over in t…
16 Jul 2021
Why the UK's 2.5% inflation is a big deal
Inflation

Why the UK's 2.5% inflation is a big deal

After years of inflation being a financial-assets problem, it is now an “ordinary things” problem too, says Merryn Somerset Webb. But central banks st…
16 Jul 2021
An absurdly cheap healthcare stock to buy now
Share tips

An absurdly cheap healthcare stock to buy now

The pandemic has vastly accelerated the shift towards telehealth, making Cigna a long-term buy
20 Jul 2021