Three to buy
4Global
The Mail on Sunday
4Global helps cities and organisations arrange and profit from sporting events. The firm has worked on “virtually every summer and winter Olympic Games”, from London to Tokyo, as well as World Cups and other football championships. Over the last few months alone it secured a £4m contract with Sport England, a £370,000 contract with the Peruvian government, and a deal with the city of Los Angeles to “maximise the legacy of the 2028 Olympic Games”. It has a pipeline of contracts worth over £100m over the next four years, and profits are expected to more than triple to £1.1m for the year to March 2023 from £325,000 this year. Buy in now. 84p.
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Medtronic
The Daily Telegraph
US-listed Medtronic isn’t a household name, but its products play a big part in the lives of many people. The firm makes devices such as insulin pumps and defibrillators. Its shares have underperformed for three years, initially because it seemed to be losing market share and recently because Covid-19 has caused delays to elective surgeries. But a new CEO should get growth back on track after the pandemic. The shares are cheap, assuming a forecast free cash flow yield of 4.5%-5% and high single-digits growth. $106.39.
Amgen
Motley Fool
Biotech giant Amgen’s stock fell slightly over the last year, but thanks to an increase in its dividend and the “market wide pivot to large-cap stocks among investors”, its stock has gained 13.2% from the start of December. That “ought to continue for the remainder of the year”, helped by the FDA’s approval of its lung cancer treatment last May. $229.20.
Three to sell
Aston Martin
The Sunday Times
No Time to Die, the latest James Bond film, featured “no fewer than four Aston Martin models”, including the carmaker’s latest offering, the Valhalla. This £700,000 plug-in electric hybrid is set to launch in 2023 and only 1,000 will be made. But the company “has more immediate concerns”. Profits for the financial year to December 2021 are set to be £15m below expectations due to sluggish deliveries of the Valkyrie, its £2.5m “flagship hypercar”. Sell now. 1,452p.
Wood Group
The Sunday Telegraph
Investors who purchased shares in energy-services specialist Wood Group over the last few years “are likely to be deeply in the red”: the shares have lost 76% of their value over the last five years. First-half revenue for the six months to June 2021 fell 23% compared to the same period the year before, and its latest trading update “included a downward revision to revenue and profit”. Debt is also expected to be higher than anticipated. Avoid. 206.5p.
Robinhood Markets
Forbes
Shares in discount-brokerage firm Robinhood began trading at $35 when the company floated in July, and peaked at $85 a week later. They have now plunged around 80%. The biggest problem is its reliance on users trading cryptocurrencies: the shares dropped after its third-quarter report showed revenue fell “way short of expectations” due to reduced activity. Accounts also dropped 4% to 22.4 million, monthly active users fell 11% to 18.9 million, and average revenue per user fell 36% to $65. The firm expects “seasonal headwinds and lower retail trading” in its December update. Avoid. $16.
...and the rest
The Daily Telegraph
Naked Wines has reinvented itself from a chain of wine warehouses to a promising online wine business. Sales growth has fallen from last year and the company is suffering from supply chain problems, but it has a “well defined and differentiated strategy”. However, real profitability “lies in the future”, making it difficult to value. Hold. 602p. Videogames company Team17 benefitted from the pandemic as more people sought out entertainment at home. Its latest trading update revealed sales and profits are set to be ahead of expectations and better than in 2020. Keep holding. 800p.
The Mail on Sunday
Made Tech helps the public sector use technology better. Revenues doubled last year, then soared 131% to £11.7m in the six months to November. Expect it to win more contracts from central government and local authorities (112p). Medica provides teleradiology services, allowing the NHS to share scans quickly among specialists. Demand fell in 2020 as hospitals focused on Covid-19, but its services will be even more important as they try to clear their backlog. Sales are expected to rise 66% to £61m this year and profits to double to £10.3m. Solid cash flow should let it pay a 2.6p dividend. 163p. Hornby makes train sets, as well as owning the Scalextric, Airfix and Corgi toy brands. The business has been transformed since the current CEO took over in 2017. It was hit by supply-chain issues last summer, but demand is robust in the UK and overseas. The stock should recover strongly from here. 42p. Ideagen’s software helps organisations comply with regulations. Its market is fragmented with plenty of opportunity for growth through acquisitions. Buy. £2.70.
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