Share tips of the week – 6 August
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
The Daily Telegraph
The craft-beer movement was seen as a threat to the “drab monoliths” such as Carlsberg. But the movement has revitalised the beer market. Carlsberg had “lost its way” but the CEO, Cees ‘t Hart, brought in six years ago has turned the company around, updating the firm’s infrastructure and dividing the portfolio in two. One half comprises premium products such as craft beer, while the other focuses on fast-growing emerging markets. Expect double-digit profit growth in the next few years. Dkr1,169.50
Weiss Korean Opportunity Fund
The Mail on Sunday
Many Korean firms have voting and non-voting shares, a structure designed to ensure founders “retained control of their businesses” once they floated. Non-voting shares pay higher dividends to make up for this, but still trade at a discount to voting shares. Weiss Korean Opportunity Fund was set up to take advantage of that. It has significantly outperformed the local market since its inception in 2013. Korean companies are leaders in areas ranging from “sophisticated technology to green energy”. Investors should take advantage. 271p
Zoo Digital translates films and television shows into various languages. The firm has established a global presence through contracts with Disney Plus, Netflix and Amazon Prime. In the pandemic the company made money by translating networks’ older content or adding subtitles as new productions stopped. Now it is benefiting from an increase in new productions. Sales rose by 33% to $39.5m in the year to March. 138p
Three to sell
Capital & Counties Properties
West End landlord Capital & Counties says 29 new leases and renewals were agreed in the first half of 2021. Easing restrictions have allowed retailers and hospitality to reopen, which means higher sales. But “the hope of recovery” cannot make up for a 5.1% decline in the group’s total property value to £1.8bn. Even though footfall has improved, the trend may not endure. The group received no state support throughout the pandemic, but its tenants did. When the aid is withdrawn, the vacancy rate could increase. The rise of online shopping is another headwind. Sell. 168p
The Motley Fool
Intel dominates the market for central-processing units for laptops, desktops and data centres. But it has lost some prestige in recent years. Manufacturing problems have delayed the release of two types of chip since 2015. Meanwhile, the group posted a “mediocre” performance for the second quarter of 2021. Revenue was slightly lower than last year at $19.6bn, and sales in its data-centre business dropped by 9% after a 20% decline in the first quarter. Avoid for now. $54.40
This Chinese tech giant, which focuses on internet-related services and artificial intelligence, is “extremely popular”. Despite Covid-19 the firm still generated sales of $4.3bn in the first quarter of 2021, up by 25% year-on-year. But the stock has slid by a third in six months as Chinese regulators crack down on domestic firms listed on foreign exchanges. Avoid the stock until “regulatory circumstances” are clear. HK$161.60
...and the rest
The Mail on Sunday
Construction group Morgan Sindall’s results for 2021 will be far ahead of expectations; in the first half, pre-tax profit was 46% ahead of the same period in 2019. There is “plenty of cash on the balance sheet” and the firm has a workload worth £8bn. The shares yield 3.6%. Hold (2,340p).
The Daily Telegraph
Coats is the leading supplier of industrial sewing thread, zips and fasteners. First-half sales for 2021 are expected to surpass the 2019 figure by 4%. Its products are indispensable. The economic recovery should help both margins and profits. Hold (70p). Meat-alternative producer Beyond Meat is set to reap the biggest rewards from the rise of meat-free food. Since its launch in 2016 sales have rocketed and they should rise by at least 40% a year over the next two years. Buy ($126).
Coca-Cola’s second-quarter performance was its best in some time. Sales grew by 42% to $10.1bn, nearly $1bn above forecasts. The core Coca-Cola brand’s sales were up by 12%, while Sprite and Fanta saw an 18% increase. Keep buying ($57).
Price-comparison site Moneysupermarket.com has been hit by the collapse of the travel sector, which led to a 10% decline in sales in the group’s insurance segment in the half-year to June. Reduced demand for credit products and stricter lending criteria also “constrained volumes”. But cash generation remained solid and “nascent inflation” is favourable to the business as consumers “become ever more price-conscious”. The stock is a buy (262p).