Five to buy
(Investors’ Chronicle) RELX, which mostly analyses data for a wide range of sectors, also runs events. Revenue at this division slumped by 71% in 2020 due to Covid-19 restrictions. But its three largest business areas, scientific, technical and medical, and risk and legal, posted combined growth in operating profit of 4% to £2.25bn. It’s also continued to invest in itself, completing 11 acquisitions in 2020, some of which have supported its “digital-first strategy”. Electronic revenues grew by 4% year on year in 2020 to £6.18bn. The group’s mostly digital operations “should be able to see it through the storm”. 1,742p
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
(Shares) Chemicals firm Elementis “ticks all the boxes for an investor looking for an overlooked and undervalued stock set to benefit from the reopening of society and the economy”. The firm has been “marked down” by the market in the past over its chromium division, with chromium prices having been weak “for years”. But its other three divisions, personal care, talc, and coatings, now produce 80% of its earnings. Analysts estimate that 50% of the group’s profits in 2020 will come from coatings, used for the industrial and construction sectors, as these sectors recover from the pandemic. Net debt, meanwhile, is falling. 125p
Rainbow Rare Earths
(Evening Standard) Rainbow’s shares “have been up and down” for a few years. But the news that China might restrict exports of rare earths has sent prices, and Western miners’ stocks, soaring. Rainbow’s shares have jumped from 3.3p in October to 18p this month. A new CEO has been praised for his role in improving the performance of the company’s main mine in Burundi. The company said it has the necessary infrastructure in place to process rare earth elements; they are usually sent to China for that purpose. The metals should also be “cheap to extract”. Rainbow is also likely to raise funds to expand other operations in Africa by the end of the year. 19p
(The Sunday Telegraph) British Airways’s owner IAG reported a 77% decline in passenger traffic in its latest quarter, which translated to a £1.1bn operating loss compared with a £1.2bn operating profit in the same period last year. Despite ongoing lockdown measures in the UK and across Europe, “the prospect of a post-coronavirus economic recovery provides a turnaround opportunity for the carrier”. The success of the vaccine rollout and the release of pent-up consumer demand bode well. The firm has taken sensible steps to improve its financial position in the meantime. The firm has cut costs, cancelled the dividend and scaled back capital-expenditure plans. It also raised £2.4bn in the fourth quarter of 2020. This is a relatively risky play, but the potential rewards on offer seem “sufficiently high”. 117p
(Mail on Sunday) Clarity over Brexit “has put a spring in the step of many a farmer” as deals are struck with countries outside Europe. That is good news for Welsh farming-supplies business Wynnstay. It boasts 25,000 customers nationwide, “from the largest cattle farmer in Wales to smallholders with a pony and a paddock”. Covid-19 and Brexit have encouraged more consumers to buy British and “canny farmers” are pouring money back into their farms so that they can “thrive in a post-Brexit future”. Since it listed in 2003, Wynnstay has delivered 17 years of uninterrupted dividend payments, and it looks likely to extend that streak over the next few years. 469p
...and the rest
Toronto’s rare earth metals miner Mkango Resource’s shares have risen steadily since October. Investors have been encouraged by the news that it is developing a rare earths project in Malawi as well as “some interesting recycling projects” that aim to find ways of reusing rare earth metals in old energy turbines. It relies on China for processing, but is still worth a look. Buy (18p).
Clipper Logistics boasts clients such as H&M, John Lewis and Marks & Spencer. It has benefited from the surge in online shopping and a government contract to distribute PPE. Sales and profits are rising. The shares have jumped by nearly 300% in a year and are worth holding. (556p).
Mail on Sunday
Scottish housebuilder Springfield Properties specialises in spacious homes, but the group is moving into the private-rental and affordable-housing markets too. The latter poses a “significant growth area”. The share price has jumped since the group joined Aim four years ago, “but there is plenty more mileage” in it. A “tasty dividend” is on offer too. Buy (145p). Wound dressings supplier Advanced Medical Solutions was hit last year as routine operations were postponed owing to Covid-19, but as they resume this year the company should see a “strong recovery”. Buy (236p).
The Sunday Telegraph
Tesco is returning almost £5bn to shareholders via a special dividend due at the end of February. Hold (242p). Naked Wines, which sold its bricks-and-mortar business to focus solely on its online arm, took off during the pandemic. Despite the reopening of restaurants and bars, it saw far fewer subscription cancellations in 2020 than it did in 2019. It looks poised to continue to grow even after bars and restaurants reopen in the next few months. Hold (813p).
Nationwide: UK house prices creep up by 0.2% - are we heading for a rebound?
Nationwide’s latest house price index shows property prices inched up by 0.2% as demand warms up - will this trend go into 2024?
By Kalpana Fitzpatrick Published
December 2023 NS&I Premium Bond winners revealed - have you won the jackpot?
Two Premium Bond holders are now millionaires as NS&I reveals December winners. Find out if you’re one of them
By Vaishali Varu Published
M&S shares shift from frumpy to fabulous as pre-tax profits are up by 56%
M&S is performing strongly and has announced it will pay a dividend for the first time since the pandemic.
By Dr Matthew Partridge Published
The rise and fall of Sam Bankman-Fried – the “boy wonder of crypto”
Why the fate of Sam Bankman-Fried reminds us to be wary of digital tokens and unregulated financial intermediaries.
By Jane Lewis Published
Three defence stocks set to flourish in an era of instability
A professional investor tells MoneyWeek where he’d put his money. Tom Bailey highlights three defence stocks that look promising.
By Tom Bailey Published
EasyJet shares are volatile but enticingly cheap
The EasyJet group has shrugged off the cost-of-living crisis, restarted dividends and shares look good value.
By Dr Matthew Partridge Published
The fallout from the war on landlords
Investors fleeing the market and the rise in rents are affecting us all.
By Charlie Ellingworth Published
Eight small-cap trusts to bet on
Funds investing in market minnows are out of favour, but the cycle will turn. Here are the best bets.
By Max King Published
Trust in US TIPS to beat inflation
In an inflationary market TIPS, the US Treasury Inflation-Protected Securities are most compelling says Cris Sholto Heaton.
By Cris Sholto Heaton Published
What is Vix – the fear index?
What is Vix? We explain how the fear index could guide your investment decisions.
By Dr Matthew Partridge Published