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

Halfords 

(The Daily Telegraph) Demand for electric cars has “soared” in the pandemic and is expected to grow further as the UK’s 2030 ban on petrol cars moves closer. So consider Halfords, which has invested heavily in an “electrified future” for the automotive industry, purchasing technology to service electric cars and training staff, which could give it a “competitive advantage” over smaller garages. It’s also counting on rising demand for electric bikes and scooters. It has invested in its online presence and digital sales rose by 76% in the latest quarter. 315p 

CentralNic 

(The Mail on Sunday) CentralNic provides companies with software that allows them to create an online presence via websites and email marketing. The group operates worldwide and shares recently jumped after boss Ben Crawford revealed a 121% surge in sales in 2020 as firms rushed to make it as easy as possible for customers stuck at home to buy online. Though some investors may be inclined to take profits, the company looks set to continue at its current pace. It should keep delivering as more companies realise the value of a strong online presence. 81p 

Rotork 

(Investors’ Chronicle) Covid-19 weighed on Rotork’s operating profit in 2020, sending it down by 6%. But the industrial-valve specialist says demand has “started to show signs of recovery”. The company relies heavily on the oil and gas sectors, and as things begin to open up it looks set to recover alongside the wider economy. Its net cash position currently stands at £178m, two-thirds higher than last year. The strong balance sheet should allow it to ride out the end of the pandemic. 372p

Dotdigital 

(Shares Magazine) Dotdigital is “a true software-as-a-service (SaaS) rarity” and its shares look poised to reward investors “handsomely” in the years to come. Its platform provides digital-marketing firms with all the necessary tools to design, create and monitor campaigns. In the six months to December 2020 the company produced organic revenue growth of 22% to £28.2m, and earnings before interest, tax, depreciation and amortisation jumped by 13% to £10.5m. Dotdigital “has certainly been a Covid-19 winner”, but its success is likely to extend “far beyond lockdown”. 170p 

Vertex Pharmaceuticals 

(Barron’s) Vertex Pharmaceuticals’ shares climbed by over 800% from 2012 to 2020. But in mid-October the company cancelled its development of a “once-promising drug” after disappointing trial results. The stock tumbled by 25%, which presents “an opportunity for investors to get back in”. The firm remains “a powerhouse in cystic fibrosis treatment” and its pipeline beyond the disease is also “coming into focus”. It is trialling sickle-cell, kidney disorder and Type-1 diabetes treatments as well as experimental pain drugs, all of which present growth opportunities. $208.44 

Rentokil 

(Interactive Investor) Rentokil reported an increase in sales of over a third in 2020 as its specialist-cleaning and disinfection products thrived during the pandemic. The result was the resumption of its dividend as profits rose by 4% to £355m. Overall revenue increased by 5% to £2.8bn, although sales at its pest-control business rose by only 1% as hotels, restaurants, schools and offices closed. Nevertheless, things should improve as the economy opens up. Long-term momentum seems to be “in the company’s favour”. 467p

...and the rest

The Times 

Oil firm Lamprell’s foray into the renewable-energy sector has yielded encouraging results. But the group will be in the red until at least 2022 and there is “no dividend in sight”. Avoid (78p)

Investors’ Chronicle 

Power-converter specialist XP Power had a productive 2020, with profits jumping by nearly a third to £46m for the year as sales in semiconductor-equipment surged. The firm also expanded its manufacturing facility in Vietnam in 2019, which helped shield it from the impact of US tariffs on goods imported from China. Buy (5,400p). Precious metals miner Polymetal “kept things simple in 2020”, maintaining its cost level and letting profits “roll in” as gold prices rose. Buy (1,472p)

The Mail on Sunday 

Shares in maps-software firm 1Spatial look set to increase as the company rolls out its growth strategy. The business has “a number of blue-chip customers” and its operations are expanding overseas too. The order book for forthcoming projects is “strong”. Buy (35p).  

Shares magazine 

Supermarket Income Reit’s 4.5% return in the past year “may not... quicken the pulses”, but its forward yield of 5.4% looks attractive. The portfolio leans heavily towards supermarkets that can fulfil online orders, which has proved a winning strategy during the pandemic. Buy (110p). France’s Eurofins is a leader in pharmaceutical and cosmetics-laboratory testing. Its full-year 2020 results exceeded market forecasts and it has raised its 2022 and 2023 projections. The current share pullback owing to the “flight from quality” is the ideal opportunity to invest before the stock makes “new highs on the raised targets”. Buy (€75.29)

Recommended

Three strong Asian stocks trading at bargain prices
Share tips

Three strong Asian stocks trading at bargain prices

Professional investor Nitin Bajaj of the Fidelity Asian Values investment trust picks three stocks that dominate their industries, earn good returns o…
20 Sep 2021
Iris Apfel: an inspiration to young fashionistas
People

Iris Apfel: an inspiration to young fashionistas

Iris Apfel made her name as a high-society interior designer before a show at the New York Met turned her into a fashion influencer. At 100 years old,…
19 Sep 2021
Warsaw and Stockholm: the unexpected new threats to the City of London
UK stockmarkets

Warsaw and Stockholm: the unexpected new threats to the City of London

London has seen off challenges from Frankfurt and Paris, but two other booming financial centres are a bigger threat, says Matthew Lynn.
19 Sep 2021
The charts that matter: more pain for goldbugs
Economy

The charts that matter: more pain for goldbugs

Gold investors saw more disappointment this week as the yellow metal took a tumble. Here’s what’s happened to the charts that matter most to the globa…
18 Sep 2021

Most Popular

The times may be changing, but don’t change how you invest
Small cap stocks

The times may be changing, but don’t change how you invest

We are living in strange times. But the basics of investing remain the same: buy fairly-priced stocks that can provide an income. And there are few be…
13 Sep 2021
Two shipping funds to buy for steady income
Investment trusts

Two shipping funds to buy for steady income

Returns from owning ships are volatile, but these two investment trusts are trying to make the sector less risky.
7 Sep 2021
How to stop recurring subscriptions becoming a drain on your money
Personal finance

How to stop recurring subscriptions becoming a drain on your money

Tracking and pruning subscriptions isn’t as easy as it sounds. Here's how to take charge.
14 Sep 2021