Share tips of the week – 12 November
MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
Five to buy
Foresight Sustainable Forestry
(The Mail on Sunday) Foresight Sustainable Forestry Company will be key to the government’s plan to plant trees across 75,000 acres a year to help absorb carbon dioxide, while providing investors with annual returns of at least 5% above inflation. The group will float on the London Stock Exchange later this month and aims to raise up to £200m at £1 a share. Just 13% of the UK is forested, so there is ample scope for growth; timber prices have grown at a rate of 6% a year, a trend expected to continue. The company will initially generate revenue from timber sales.
(The Sunday Times) The shared-officer provider has “breathed a sigh of relief” at the return to work. IWG owns shared-office space provider Regus and it reckons occupancy levels at the offices it had pre-Covid-19 are now above 70%. IWG is considering spinning off its digital and tech businesses from its office-leasing arm in the hope that this will create more value for investors. IWG should benefit from flexible working as companies seek to downsize their offices to trim costs. It has a wide pricing range and offers access to private offices as well as shared spaces. 310p
(The Daily Telegraph) DIY chain Wickes demerged from former owner Travis Perkins six months ago, so investors and analysts haven’t had enough time to get to know the stock. This gives investors “the chance to bag a bargain”. The business is well run and its relatively small stores are easy and cheap to refurbish. The prospects for the DIY sector “look favourable” as the housing market continues to boom and we keep improving our properties. Despite concerns about cost inflation and supply-chain problems, the company confirmed its positive guidance for the year in its third-quarter results. Now is a good time to buy shares in a promising company. 219p
(Investors’ Chronicle) Lok’nStore, the self-storage company, has vowed to pursue a “more progressive” dividend policy as it prepares to open new sites, encouraged by increased occupancy rates. In its annual results for the year to July it said it recommended an annual dividend of 15p per share, up from 13p in 2020 and marking the tenth consecutive yearly increase. The self-storage sector has been “relatively undamaged by national lockdowns”. Demand for storage soared when families “turned box rooms into home offices” and hospitality businesses looked for places to keep their furniture. There is a shortage of self-storage in the UK, which could provide exciting growth prospects, and the company has invested £26.9m in new facilities and secured a strong pipeline of new sites. 870p
Blade Air Mobility
(Barron’s) Blade “is bringing ride-sharing to helicopters”. Dubbed the Uber of the sky, the company oversees a network of 29 operators with different aircraft transporting passengers and cargo in cities around the world. It charges customers combinations of annual fees and ticket prices per ride, and takes a portion of the sales. It operates ten routes and is planning to expand to 28 by 2024 through acquisitions and organic growth. Blade is also a less risky way to invest in the trend towards electric vertical takeoff and landing (eVOTL) aircraft; these will use its network in future. Sales doubled to $30m in the first nine months of Blade’s fiscal year and it is getting close to making a profit. $11.28
..and the rest
The Daily Telegraph
Whitbread, the owner of hotel chain Premier Inn, is benefiting from the travel sector’s reopening. CEO Alison Brittain thinks revenue per available room could reach pre-pandemic levels this financial year. However, the company could be affected by rising supply costs or the return of travel restrictions, so hold for now (3,310p).
Trainline’s shares dropped after its half-year results, which revealed that strong sales had been overshadowed by the government’s plan to create a state-owned ticket retailer. The company “is far from on track”: net debt remains high at nearly £170m. Sell now (303p). Travel magazine and events business Time Out had a tough pandemic as tourism shut down. Its street market and media businesses lost money in the year to 30 June, but margins rose thanks to an increase in digital advertising, which is more profitable than its print counterpart. Hold (55p).
Coca-Cola’s shares have “lost some fizz of late”, but the company’s acquisition of sports-drink maker Bodyarmor for $5.6bn could “add another string to its bow”. The company remains “an excellent long-term investment”. Buy ($56.17).
E-commerce and online auction company MercadoLibre’s shares have more than quadrupled over the last three years. It is the e-commerce leader of Latin America, operating in 18 countries. The Latin American e-commerce sector is expected to double over the next four years. Buy ($1,632). Intuitive Surgical makes robotic surgical systems. Despite increased competition the firm has secured a large market share and has “tremendous” prospects. Buy ($365).