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.
Three to buy
CMC Markets
(The Times) CMC Markets “has been one of the big winners from the Covid-19 crisis” as “bored Brits with savings” flocked to online trading platforms. Sales for the year to 31 March are set to reach £400m, exceeding expectations. CMC’s rally “has some way to run yet” as the market volatility it has been thriving on won’t end soon and the economic recovery is just beginning. New customers are unlikely to “ditch their trading accounts”. 511p
Entain
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
(The Daily Telegraph) “Investors are waking up to the fact that Britain’s gaming companies have a lot to offer their American rivals.” British firms have had a “head start” in developing technology necessary for online betting because until recently betting on sports and games was banned in the most of the US. Entain rejected a bid from an American firm earlier this year, but the company has proved it can expand on its own. Entain is undervalued and its new CEO looks “up to the task” of expanding the group. 1,529p
Croda
(Shares) Chemicals firm Croda is a “highly exciting stock”. Its “new-found expertise” in lipid nanoparticles, or LNPs, the fatty molecules used with drugs and vaccines to ensure the chemicals don’t get destroyed by the body and can enter cells, bodes well for the future. Only a few companies in the world make LNPs, which are crucial in mRNA treatments such as the Pfizer and Moderna Covid-19 vaccines. The growth potential “means investors should not get hung up on an apparently expensive valuation”. There are several mRNA vaccines in development. 6,354p
Three to sell
CVS
(The Daily Telegraph) Veterinary group CVS’s shares have “galloped to a fresh record high”. But the stock now trades on over 50 times this year’s earnings forecasts. The balance sheet is healthy and the pet-care market remains strong, “but the rating now looks very full. Time to move on.” 1,806p
Cineworld
(Investors’ Chronicle) Cineworld reported its first-ever annual operating loss in 2020 – $2.26bn – as sales slumped by 80% to $852m. It comes as no surprise given lockdowns across the world shut cinemas and movie releases were postponed. Though Cineworld is banking on pent-up demand to shore up its balance sheet in 2021, it acknowledges that cinemas are unlikely to reach pre-pandemic capacity before 2025. The firm also struggled before the virus. In an effort to “justify the price discrepancy” between a cinema visit and a Netflix subscription (the former costs as much if not more than the latter) by refurbishing its sites, it “loaded the company with debt”. Post-virus demand alone “will not be enough to rescue Cineworld”. 106p
The Geo Group
(The Motley Fool) The Geo Group is a real estate investment trust specialising in prisons, rehabilitation facilities, and immigration-detention centres across the US. The Biden administration has decided not to renew these operators’ government-service contracts, which will cost Geo 25% of its overall revenue. The company’s sales and net income for 2020 dropped to $2.35bn and $113m from $2.48bn and $166.6m in 2019. The group is now is generating less cash than it can pay out in dividends. Around $3bn of debt is another reason to avoid the stock. $7.05
...and the rest
The Daily Telegraph
Full year results at soft-drinks group AG Barr “fell pretty flat”. Sales were down by 11% owing to lockdowns as increased consumption of Irn-Bru, Rubicon and Funkin at home was not enough to offset the loss of business from pubs and restaurants. But the firm has a solid balance sheet and hopes to return to the dividend list in the coming year. Hold (495p). Vaccine maker AstraZeneca is worth buying on weakness. Its “intelligent approach to researching new treatments”, its presence in China and “highly capable boss” all bode well (7,289p).
Investors’ Chronicle
Biotech manufacturer Bioventix’s revenues for the six months to December were broadly flat, and revenue estimates for the new year “remain under review” given the disruption to the diagnostics industry amid the pandemic; resources were directed towards those affected by the virus. The murky outlook makes the stock a hold (4,175p).
Shares
Specialist lender Arbuthnot Banking focused on growing its deposits in 2020 to avoid “contagion from the slowdown” and the potential for a liquidity squeeze. Customers’ balances increased by 13% to £2.36bn, and the bank has been “de-risking” by cutting exposure to residential property. Buy (862p).
Motley Fool
Cruise operator Carnival must wait several more months before “revenue-generating customers” board its ships. Analysts expect a 96% plunge in annual sales in the quarter to 1 March (1,707p). Electric-vehicle charging-kiosk operator Blink Charging makes $6.2m in sales but is worth $1.7bn. That makes no sense ($42.15). Avoid both.
-
Coventry Building Society bids £780m for Co-operative Bank - what could it mean for customers?
Coventry Building Society has put in an offer of £780 million to buy Co-operative Bank. When will the potential deal happen and what could it mean for customers?
By Vaishali Varu Published
-
Review: Three magnificent Beachcomber resorts in Mauritius
MoneyWeek Travel Ruth Emery explores the Indian Ocean island from Beachcomber resorts Shandrani, Trou aux Biches and Paradis
By Ruth Emery Published
-
The industry at the heart of global technology
The semiconductor industry powers key trends such as artificial intelligence, says Rupert Hargreaves
By Rupert Hargreaves Published
-
Three emerging Asian markets to invest in
Professional investor Chetan Sehgal of Templeton Emerging Markets Investment Trust tells us where he’d put his money
By Chetan Sehgal Published
-
What to consider before investing in small-cap indexes
Small-cap index trackers show why your choice of benchmark can make a large difference to long-term returns
By Cris Sholto Heaton Published
-
Why space investments are the way to go for investors
Space investments will change our world beyond recognition, UK investors should take note
By Merryn Somerset Webb Published
-
Time to tap into Africa’s mobile money boom
Favourable demographics have put Africa on the path to growth when it comes to mobile money and digital banking
By Rupert Hargreaves Published
-
M&S is back in fashion: but how long can this success last?
M&S has exceeded expectations in the past few years, but can it keep up the momentum?
By Rupert Hargreaves Published
-
The end of China’s boom
Like the US, China too got fat on fake money. Now, China's doom is not far away.
By Bill Bonner Published
-
Magic mushrooms — an investment boom or doom?
Investing in these promising medical developments might see you embark on the trip of a lifetime.
By Bruce Packard Published