Three to buy
Entain
(Evening Standard) The owner of Ladbrokes and Coral has shown that it was “absolutely right” to reject an £8bn bid from MGM, an operator of Las Vegas casinos, earlier this month. Online betting revenues rose by 41% in the last quarter of 2020. In the US, where a gold rush is underway for the newly opened sports betting market, revenues for its joint venture (with MGM) soared by 130% last year. For all the takeover brouhaha, the stock is still much cheaper than Flutter, Entain’s “biggest rival”. 1,275p
Micron Technology
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
(Shares) Not all US technology stocks are richly priced. The shift towards working from home and the roll-out of 5G mobile networks are driving strong global demand for semiconductors, but the pandemic has disrupted production and constrained supply. This producer of memory microchips stands to gain, with earnings per share forecast to rally by 45% this year and do even better in 2022. Given that earnings trajectory, the valuation looks “undemanding” with the shares on a 2021 price/earnings (p/e) multiple of 19.6. $80.72
Zoo Digital
(The Mail on Sunday) Streaming means that television programmes can cross borders more easily than ever before, but half of the catalogue at the likes of Netflix is in foreign languages. That is where this cloud-based subtitling and dubbing specialist comes in. It replaces studio-based dubbing with Zoom-style recording sessions, cutting costs and expanding the talent pool. Interim results to last September showed a “near-fivefold” rise in dubbing revenue. Buy. 79p
Three to sell
Anglo American
(The Sunday Telegraph) There is bold talk of a new boom in raw materials but much of the optimism already appears to be in the price at this mining giant. The shares have more than doubled since last year’s spring slump. They could yet have further to rally but the risks are rising, so on balance we think it is more prudent for investors to bank the already handsome gains. The mining industry is infamously cyclical so we “won’t push our luck”. 2,628p
Sage
(The Times) What technology rally? This accounting software specialist’s shares are selling for the same price now as they were in 2016. Its steady-as-you-go approach looks prudent to some, but more like a lack of ambition to most. A 3% dividend yield appears secure thanks to dependable income from subscriptions, which account for 68% of revenue so income investors may like the shares. But rivals Xero and Intuit have been expanding much faster and have arguably stolen a march on Sage in new growth areas. Investors “should search elsewhere”. 601p
Synairgen
(The Daily Telegraph) Shares in this biotech business have vaulted by more than 90% in the past two months because of promising early trial data on SNG001, an inhalation therapy that it is developing for Covid-19. Nevertheless, there are still plenty of regulatory and commercial hurdles to clear before the treatment reaches the market, at which stage it will be “anyone’s guess how many doses” will actually sell. As a firm with no revenues and a very volatile share price, Synairgen was always a speculative play and now looks a good time to bank profits. 171p
...and the rest
The Daily Telegraph
Reforms to leasehold rules have not made this a happy new year for the Ground Rents Income Fund, but the trust boasts a 6% dividend yield and a huge 41% discount to net asset value (NAV), so existing shareholders should stay invested (63p).
The Mail on Sunday
Countries around the world are turning against the mass use of antibiotics in livestock rearing. That is good news for consumers and even better news for natural feed-additives maker Anpario. The shares are up by 78% in a year. Take some profits but retain a stake (550p).
Investors Chronicle
“No-frills warehouse retailer” Costco’s membership model keeps customers loyal and has helped it to thrive in the face of e-commerce. This is one bricks-and-mortar operator with a bright future. Buy ($362).
Shares
Entertainment giant Walt Disney is a two-way bet: the Disney+ streaming service has flourished during lockdown, while reopening will be good for its theme parks. This is a “truly exceptional” company ($172). Asset manager Polar Capital is a high-quality, reasonably-priced business that yields 5.5% (660p). Shares in animal genetics business Genus have hit an all-time high, but positive updates mean the shares still have momentum. Buy (4,564p).
The Times
Aim-listed app Kooth works with the NHS to help children with mental health problems. The lockdown blues have driven renewed interest in digital-therapy services and there are growth opportunities as firms seek better staff mental healthcare. Buy (272p).
-
Side hustle tax changes: HMRC reforms could save thousands from filing self-assessment tax returnsThe government plans to raise the tax-free threshold for trading income – here is how it could help your side hustle
-
Return to the office: is working from home coming to an end?More and more employers want their staff to return to the office. Is it a good idea?
-
Cash in on the growth prospects of Europe's companiesOpinion Marcel Stötzel, co-portfolio manager of the Fidelity European Trust, selects three stocks
-
Why CEOs deserve a pay riseOpinion The CEOs of big companies often come under fire for being grossly overpaid. But the truth, as per some economists, is the opposite. Do they merit a pay rise?
-
Rolls-Royce stock jumps 15% – could it climb further?Aircraft-engine group Rolls-Royce’s CEO has been hailed as a hero for spearheading the firm’s recovery. And the future looks bright, says Matthew Partridge
-
The power of private marketsInterview Helen Steers, co-manager of the Pantheon International investment trust, tells MoneyWeek about the vast array of compelling opportunities in private equity
-
Vertex Pharmaceuticals is an uncommon opportunity in rare diseasesVertex Pharmaceuticals operates in a profitable subsector and is poised for further success
-
Global investors have overlooked these top tips in emerging marketsOpinion Chris Tennant, co-portfolio manager of Fidelity Emerging Markets, picks three attractive companies in emerging markets
-
King Coal has not been dethroned yet — should you buy?The demand for coal is only growing, yet investors don’t seem to want to take advantage of the opportunity, says Rupert Hargreaves
-
It’s time to start buying Europe again, says Merryn Somerset WebbOpinion Europe's stocks are cheap and the economic backdrop is starting to look cheerier, says Merryn Somerset Webb
