Share tips of the week – 17 September

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

Accenture 

(The Daily Telegraph) Accenture’s stock is one of the best ways to profit from “the fourth industrial revolution”, which will see major improvements in productivity thanks to the spread of digital technology. The company has become the leading consultant in this field. Its ability to retain staff, which it does partly by issuing new shares for employees as incentives, has allowed it to step ahead of its key rivals. It generates plenty of cash, which makes it a “relatively low-risk” play on digital technology. $341

Dunelm

(Mail on Sunday) Home-furnishings group Dunelm “has had a good pandemic”. It launched a strong e-commerce operation before lockdown and quickly shifted to a click-and-collect service when shops were forced to close. Dunelm’s out-of-town retail parks allowed for social distancing when in-person shopping restarted. Full-year figures this week revealed how much lockdown “has brought out our inner interior designers”. Shops were closed for a third of the year but sales were up by 26% and profits by 44%. There is scope for further growth. 1,515p 

Midwich 

(Investors’ Chronicle) The cancellation of live music events thanks to Covid-19 has done audiovisual-products retailer Midwich no favours. But its two top markets are education and companies, both of which have thrived in the last 18 months. Hybrid working could present an opportunity as offices buy new equipment to accommodate home workers. Sales jumped by 21% in 2021. The audiovisual market should grow by an annual 7.2% for the next five years. 610p 

Three to sell

Dechra Pharmaceuticals 

(The Mail on Sunday) Dechra Pharmaceuticals, a veterinary-drugs business, has benefited from surging demand for pets in the pandemic. It posted strong double-digit operating profit and sales growth and an 18% increase in dividend in the year to 30 June.  But the boom is subsiding. CEO Ian Page has noted a decline in the number of vet visits in the US, while rival Zoetis has also reported a slowdown. A valuation of 40 times forward earnings is thus difficult to justify. “No matter how much we love our pets, there is a limit to how much we are prepared to spend.” Time to sell. 4,974p

EnQuest

(Investors’ Chronicle) North Sea driller EnQuest’s “uninspiring” half-year update saw shares drop sharply after it revealed that daily net production had fallen by 30% . Output was hit by an “unplanned third-party outage”. The company has implemented measures that are expected to improve output gradually, but average daily group production is still set to disappoint. Daily production from its Kraken field also dropped by 30% thanks to natural decline. There “is little cheer for investors”. 23p 

Oatly 

(The Motley Fool) Oatly investors have had a “wild ride”. The stock of the distributor of oat-based milk, yogurt and frozen desserts is on the slide. Sales growth is rapid but shortseller Spruce Point Capital Management has cast doubt on some of the group’s financial metrics and its sustainability practices. Several class action lawsuits have emerged. Oat milk is also ultimately “a commodity that will only become more competitive over time”. $18

...and the rest

The Times 

The likes of Featurespace have spotted an opportunity as consumers increasingly become targets for scams. The firm, which uses AI to target financial fraud, is working with banks and payment-processing firms across the world. It’s one of the most promising companies in “the sprawling portfolio” of IP Group, a FTSE 250 investor in intellectual property. It’s best known for its investment in DNA sequencing-technology group Oxford Nanopore. The firm has a long-term approach, backing business “from conception to commercialisation, meaning investors must be patient”. The company announced its first dividend this year”. Hold for now (147p). 

The Daily Telegraph

Private-equity trust HgCapital has returned 97% since March 2019 thanks to its successful investments in software companies. The trusts’s premium to net asset value (NAV) is worth paying for. Hold (397p).

Investors’ Chronicle 

Window maker Eurocell has benefited from the “home improvement boom” that began with the lockdowns last year. Sales rose by 80% year-on-year in the first half, and were 23% above 2019’s level. The shares have risen strongly but still have potential. Buy (286p). Demand for Luceco’s products is growing strongly, largely thanks to “discretionary spending” in the residential market. The company makes half its money from wiring accessories and the other from LED lightning and portable power products. Costs for copper and plastic, which are essential for its products, are up sharply, but Luceco is offsetting this through price increases. Buy (439p)

Recommended

Aviva: a share for income investors to tuck away
Share tips

Aviva: a share for income investors to tuck away

Insurance giant Aviva is one of the highest yielding stocks in the FTSE 100 – and it’s cheap, too, making it a tempting target for income investors. R…
18 May 2022
The ten highest dividend yields in the FTSE 100
Income investing

The ten highest dividend yields in the FTSE 100

Rupert Hargreaves looks at the FTSE 100’s top yielding stocks for income investors to consider.
18 May 2022
Three fast-growing, undervalued UK mid-cap stocks to buy now
Share tips

Three fast-growing, undervalued UK mid-cap stocks to buy now

Professional investor Katen Patel of the JPMorgan Mid Cap Investment Trust picks three fast-growing UK mid-cap stocks to buy now.
18 May 2022
Should you buy Vodafone shares, or steer clear?
Share tips

Should you buy Vodafone shares, or steer clear?

Vodafone grew revenue by 4% and profit by 11% last year, and offers investors a 6.4% dividend yield. So should you buy Vodafone shares? Rupert Hargrea…
17 May 2022

Most Popular

Get set for another debt binge as real interest rates fall
UK Economy

Get set for another debt binge as real interest rates fall

Despite the fuss about rising interest rates, they’re falling in real terms. That will blow up a wild bubble, says Matthew Lynn.
15 May 2022
Is the oil market heading for a supply glut?
Oil

Is the oil market heading for a supply glut?

Many people assume that the high oil price is here to stay – and could well go higher. But we’ve been here before, says Max King. History suggests tha…
16 May 2022
Value is starting to emerge in the markets
Investment strategy

Value is starting to emerge in the markets

If you are looking for long-term value in the markets, some is beginning to emerge, says Merryn Somerset Webb. Indeed, you may soon be able to buy tra…
16 May 2022