Three to buy
Superdry
(The Sunday Telegraph) Superdry’s share price has tripled in less than a year. The group “is reinventing itself”: the products’ quality and style have been improved; it has “done some canny marketing” to appeal to a wider variety of customers; and managers have also concentrated on boosting internet sales, which grew by 34% in the year to April. “Progress on so many fronts reassures us that the share price recovery is built on solid foundations.” 394p
Trident Royalties
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(The Mail on Sunday) Copper was trading at around $4,500 per tonne a year ago, but over the past few days its price has eclipsed $10,000 and it should keep rising. Metals are booming as economies begin to recover from Covid-19 and governments prepare to increase spending on infrastructure. Trident’s business is mining-royalty finance, whereby firms lend money to miners and receive a percentage of their revenues in return. Trident has already signed seven royalty agreements on iron, copper, gold and lithium. An eighth transaction “is expected imminently”. The variety of metals tempers Trident’s overall exposure to price fluctuations. 34p
Avon Rubber
(Investors’ Chronicle) Protective equipment specialist Avon Rubber’s shares reached a record peak in December, but nosedived two weeks later after it announced delays to two of its US contracts. But the firm has since released two positive trading updates, and has reported “positive momentum” in its second quarter. The group expects sales for the six months to 31 March to jump by two-fifths year-on-year to $122m, and it has “continued to secure more orders”. 3,328p
Three to sell
Calyxt
(Nasdaq) Calyxt uses gene-editing technology to alter living plant cells. The company took nine years to launch its first product: soybean seeds producing cooking oil that doesn’t degrade as fast as regular soybean oil. But it hasn’t been able to sell the seeds at a “viable price” and is still a “long way from earning any money for its investors”. The firm has several modified agricultural products in its pipeline, but investors should wait for proof that it can sell at least one of them at a profit. Avoid. $4.34
Peloton
(Forbes) Peloton shares have dropped by 50% since peaking in December, but the stock is still not a bargain. The firm has had to recall its treadmill, Tread+, after the US Consumer Product Safety Commission urged users with children and pets to stop using it, citing dozens of injuries and at least one death. The recall, which CEO John Foley dragged his feet over, “introduces considerable uncertainty into its revenue growth”. Reopening gyms, meanwhile, may dent demand for Peloton’s exercise bikes. Avoid. $83.81
EKF Diagnostics
(The Sunday Times) EKF Diagnostics specialises in “point of care” tests that allow physicians to find out in real time whether patients are suffering from conditions like anaemia, diabetes or sepsis. It has thrived throughout the pandemic as it makes sample collection kits that keep the virus “inactivated” in the tube, avoiding contamination. It supplies Public Health England and the Irish government. But can it keep up the momentum? Covid-19-related sales accounted for 40% of last year’s revenue, but beyond that “sales have fallen short”. Investors should “take profits”. 70p
...and the rest
Investors’ Chronicle
Fast-fashion retailer Boohoo has benefited from high street closures and a rise in online sales. It is investing heavily in future growth but has still managed to bolster its net cash. It looks set to “continue as an e-commerce fashion winner”. Hold (317p). WHSmith struggled throughout the pandemic but it has announced over 100 new travel stores, and much of that new business stems from North America, which is opening up “far quicker than the UK”. Hold (1,827p).
The Daily Telegraph
There are still plenty of bargains in the British stockmarket, especially for those “willing to be brave and invest in businesses and industries that remain out of favour”. Shares in International Airlines Group are trading at 210p, down from 400p, but it “could return to its pre-Covid-19 profit margin levels as soon as 2023”.
The Mail on Sunday
Increased government spending on infrastructure bodes well for Hill & Smith, the UK’s leading supplier of road-safety barriers. Though its business dipped in 2020, analysts expect figures to bounce back this year and next, with profits of £75m forecast for 2021, rising to £82m in 2022. Buy (1,578p).
Shares
Shares in medical-products firm Convatec have picked up after a slow start to the year. Sales rose by 8.7% in the first quarter of 2021 and the outlook for the remainder of 2021 is encouraging. Buy (205p). Eyewear frames designer Inspecs’ shares are up by 50% in five months. They look poised to keep profiting from pent-up demand and the overall market recovery. Keep buying (404p).
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