Six to buy
Brunner Investment Trust
(Shares) This trust buys high-quality companies worldwide, with 46% of the portfolio in the US, 46% in the UK and Europe, and Asia making up the balance. The biggest holding is Microsoft but a mix of investments across health, industrials and financials also give it exposure to the “reflation trade”. The trust has beaten its benchmark over the past five years but trades on an unjustified 16.3% discount to net asset value (NAV). Yielding 2.4% and with a reasonable 0.66% ongoing charge, this is a cheap way to access some of the world’s best businesses. 862p
Cordiant Digital Infrastructure
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(The Mail on Sunday) UK broadband usage doubled in 2020. Surging internet demand depends upon a vast network of “data centres, phone masts” and cables, but telecoms companies – the traditional owners – are increasingly selling them off to raise cash. Cordiant, which will float next month, plans to raise £500m to buy up that infrastructure. The resulting business should combine the stability of rental income with the growth of the digital sphere, as well as delivering a progressive dividend. 100p
(The Times) This maker of posh drink-mixers is entering a new phase. The shares soared more than twentyfold between listing in 2014 and summer 2018. That “extraordinary growth” period is behind it, but the firm has now consolidated as a quality operator. UK sales plunged by 22% last year as Covid-19 closed bars, but better supermarket sales and a strong showing in North America and Australia offset that effect, with overall revenue down just 3% last year. The shares should “fizz” higher when pubs and restaurants reopen. 2,504p
(Interactive Investor) Shares in this oilfield-services provider are trading close to all-time lows after a former executive pleaded guilty to bribery in the Gulf. It has been a long way down for Petrofac shares, which traded above 900p as recently as 2017. Fears of crippling fines from the regulator account for a steep valuation discount compared with industry peer Wood Group, but that also means there is scope for a big rally if the news brightens. The shares seem worth a punt. 109p
(Investors Chronicle) This leading student-accommodation provider is going through a tough period. Cancelled lectures mean many students are staying at home, hitting occupancy rates and forcing Unite to offer rent reductions. Still, the landlord’s lettings rate is still better than its rivals’, owing to its greater focus on the domestic student market. What’s more, the recovery will be rapid; strong university application rates, pent-up demand and structural undersupply mean earnings per share are likely to surpass pre-pandemic levels as soon as next year. 952p
(The Sunday Telegraph) The pandemic has revealed just how crucial reliable phone and internet access is to a modern economy. Regulators are realising that allowing telecoms operators a “decent return” is a better way to incentivise network investment than stringent price controls. Vodafone has upped its game of late, with a more flexible management structure and app-based handling of complaints that has improved customer retention levels. The dividend is not entirely secure, but things are improving on this score and the potential 6.3% yield is undeniably tempting. Buy. 125p
...and the rest
The Daily Telegraph
Healthcare outsourcer Totally provides everything from non-urgent patient helplines to out-of-hours GP services. There is significant room for growth in this market as pressures on the NHS increase. Buy (27p). Ceres Power develops world-leading fuel cell technology and then licenses out production, avoiding the risks and capital intensity of running a complex production line itself. The shares are far from cheap, but the world’s growing demand for cleaner energy means it is worth investing in “one of the UK’s best tech hopes” (1,588p).
The Mail on Sunday
Sirius Real Estate, which owns 67 German business parks and industrial estates, has climbed to a market valuation of nearly £1bn. Savvy management and Germany’s economic strength mean there should be more gains to come. Buy (95p).
Vaccine optimism has been a welcome fillip for value-play Ford Motor Company. Expect the shares to “motor higher” from here ($11.29). Robust half-year results vindicate new management at consumer-goods group PZ Cussons. The outlook is auspicious, so “keep buying” (241p). A soft patch in gold prices means now looks a good time to “buy the dip” at “reliable” Canadian miner Yamana Gold (375p).
Anglo-Swiss commodity trader Glencore could reinstate the dividend this year but new boss Gary Nagle “has his work cut out” before he can deliver a promised green transformation. Hold (246p). An unexpectedly good pricing settlement with regulator Ofgem enhances the appeal of National Grid’s 5.5% dividend yield. Buy (882p).
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