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
Flutter Entertainment
(The Times) UK regulators might be “tightening their grip” on the sports-betting industry, but “the US is going the other way”. Flutter Entertainment is in “pole position” thanks to its FanDuel brand, which boasts a 40% share of the US online sports-betting market. “There are reasons to be cautious”: the firm is in the middle of a legal dispute with Fox Corporation over its purchase of a stake in Flutter. But despite its ongoing spat with the media conglomerate, the outlook is positive. 15,295p
Hargreaves Lansdown
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) Investment platform Hargreaves Lansdown managed to attract 220,000 new customers last year, despite tarnishing its reputation by recommending Neil Woodford’s chronically underperforming fund. And “there is every reason to expect more customers to sign up”. With fewer workers benefiting from final-salary pension schemes each year, more must “save for their own future”. Only three million people use investment platforms in Britain, so there is still plenty of scope for growth. The stock has lagged owing to the “lingering association” with Woodford. 1,659p
Foresight Group
(The Mail on Sunday) The climate action movement “is gaining momentum” and Foresight Group looks well placed to benefit. The asset manager “shifted towards renewable energy” stocks 15 years ago and now operates 33 funds, which own 300 infrastructure projects “capable of powering nearly two million homes with renewable energy”. Assets under management rose by 60% to £7.2bn in the year to 31 March. The shares are an appealing long-term buy. 425p
Three to sell
(The Daily Telegraph) HSBC “faces a daunting list of challenges”, from “rock-bottom” interest rates to “walking the tightrope” between Western investors’ ethical concerns and a Chinese government “with radically different priorities”, a task that will only become more difficult. In the future the business could split between a “giant Asian bank headquartered in Hong Kong” and a smaller one based in the UK. That could be a suitable investment in the future, “but there are an awful lot of challenges to overcome first” and “a lot that could go wrong”. It’s a sell for now. 419p
Kier
(Investors’ Chronicle) Construction specialist Kier is dealing with a debt burden that jumped by almost 50% in 2020; it is to raise between £190m and £240m of equity in the next few weeks. Kier is hoping that “government rhetoric around boosting infrastructure spending” will help it achieve its revenue and profit goals for the year. But considering the “competitive challenges” that stand between the firm and its revenue targets as well as the “ultra-thin margins associated with the sector”, the shares do not seem compelling. Sell. 90p
Virgin Galactic
(Barron’s) “Space tourism pioneer” Virgin Galactic’s business model looks risky: it’s uncertain how attractive commercial space travel will be. An accident is also a risk. Any “catastrophic failure by any provider could have a crushing effect on demand for all”. Sentiment might begin to shift if the company successfully launches commercial operations in 2021, but for now its future looks too uncertain. Avoid. $26
...and the rest
Investors’ Chronicle
PureTech Health’s operating loss narrowed by 12% last year and its pipeline looks attractive. The biotech group is starting at least ten new clinical trials this year and is sitting on $443m of cash, enough to fund its operations until 2025. Buy (416p). Associated British Foods’ Primark stores enjoyed a surge in sales when they reopened on 12 April. But the high-street retailer is “still reeling” from the past year, and ABF has lost £3bn in sales and £1bn in profits in 12 months, although it has reintroduced its dividend. Hold (2,390p).
The Mail on Sunday
Solar power was the fastest-growing form of electricity generation in America last year, which bodes well for US Solar Fund. It runs 42 plants, generating enough energy for over 90,000 homes, and “should benefit from governments’ increased support for all things environmental”. Buy ($1.03).
Shares
Extracts and ingredients manufacturer Treatt posted a strong trading update in mid-April, saying it expected to grow its first-half sales by 14% while also improving its margins. Growth in the tea, health and wellness, and fruit and vegetable categories has been strong and should endure thanks to growing global demand for healthier living. Buy (1,145p). Small-cap oil and gas company Touchstone Exploration says one of its wells has “yielded a significant natural gas discovery”, which has given the shares a fillip. There is “scope for further upside”. Buy (102p).
The Daily Telegraph
Volex makes cable assemblies for medical equipment, electric vehicles and data centres. Sales for the year to 4 April will reach at least £440m, up from £391m the year before. Hold (343p).
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
-
New customer inflows sees double digit growth for equity release. Should you unlock cash from your property?
Industry data shows double digit growth in the equity release market during the second quarter. We explain what is driving the rise
By Marc Shoffman Published
-
What is an offset mortgage and should you consider one?
Mortgages Offset mortgages are a good way to put your money to work. We explain what they are and if they might work for you.
By Ruth Jackson-Kirby Published
-
UK mid-caps: an improving outlook
UK mid-caps have perked up and the rally may run further, but long-term investors should remain selective
By Cris Sholto Heaton Published
-
The tobacco industry is going smoke-free - how to profit from it
Tobacco companies have realised their traditional products are on the wane. But new opportunities have opened up – and should prove lucrative
By Rupert Hargreaves Published
-
Is it time to invest in creative industries?
Any industrial strategy should not overlook the creative industries, one of our top national assets
By David C. Stevenson Published
-
Is Mercia Asset Management set for success?
Mercia Asset Management helps the government fund smaller companies in Britain’s regions. Should you invest?
By Rupert Hargreaves Published
-
British stocks set for a boost
British stocks are due for a bounce as the UK looks more stable compared to many economies
By Alex Rankine Published
-
Ocado shares jump by a fifth
Ocado takes a turn for the better after attractive profit forecasts were announced
By Dr Matthew Partridge Published
-
The AI boom is on borrowed time
The hype around the AI boom could be on its way out – but why?
By Alex Rankine Published
-
Diploma: a blue-chip set for strong growth
Diploma, whose niche products include seals and fasteners, serves an array of growth markets. Should you invest?
By Dr Mike Tubbs Published