Three to buy
Gore Street Energy Storage
The Mail on Sunday
The UK is a pioneer in battery storage systems, which allow energy from renewable power sources to be stored and released when needed. Gore Street Energy Storage Fund “is one of the industry’s leading players”. When the company listed in 2018 it had only one site, but today it has 25 facilities with storage capacity of 700MW. Battery storage “is a key component of a secure and renewable energy mix, but it is good business too”: contracts are lengthy and Gore Street’s customers, which include National Grid in the UK and EirGrid in Ireland, are “robust and reliable”. It’s targeting a 7% annual dividend yield and has ample opportunity for growth: the pipeline has a combined capacity of 1,300MW. The fund is raising £75m more at 110p per share and it’s a buy. 113p.
Hays
The Telegraph
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Shares of recruiter Hays have lost 18% of their value since the start of 2022 despite record fees for the first half of its current financial year. They are likely to remain volatile due to global economic uncertainty, but Hays has a “solid financial position” with net cash of £237m and net finance costs covered over 13 times. The firm is highly cash generative and paid generous dividends before the pandemic. The current price “offers a relatively wide margin of safety in expectation of more difficult trading conditions”. 120.4p
The Fulham Shore
Shares
This restaurant group has come out of the pandemic as a “more resilient business” and will also benefit from “the number of competitors which fell by the wayside”. Franco Manca, its sourdough pizza brand, “has gone from strength to strength”, and both that and The Real Greek have “scalable business models” based on good-quality products, strong traffic and attractive prices. The hospitality industry faces many challenges, but this management team is one of the most experienced in the sector. Buy. 16.5p.
Two to sell
Brand Architekts
Investors’ Chronicle
Beauty product retailer Brand Architekts’ merger with haircare and skincare company InnovaDerma “has a lot going for it”. The group will be able to offer a range of 18 products to a larger customer base and accelerate growth. However, the £13.6m acquisition equates to six times InnovaDerma’s net asset value of £2.2m, and is a 70% premium to InnovaDerma’s closing price before it was announced. That’s lofty considering the company’s operating loss of £950,000 and 10% lower revenue for its latest half-year. Brand Architekts’ share price fell 15% after the announcement, reflecting its own first-half operating loss and deeper revenue decline due to delayed product launches. While the company is making the right strategic moves, the board has overpaid at a time when consumer spending is most likely to decline and inflationary pressures are liable to stick around. Sell. 92.5p.
The Times
The social network has seen a sustained spell of underperformance against rivals Meta Platforms and Alphabet, partly due to scepticism about its ability to “monetise its millions of users”: its advertising revenue was $4.5bn compared with over $209bn at Alphabet and $69.7bn at Meta. Investors have seized on Elon Musk’s investment in the hope that he would “drive product and service innovation”. However, while his arrival “makes for good headlines… the battle lies in keeping users interested and better translating that audience into advertising sales growth”. Avoid. $46.23.
...and the rest
Investors’ Chronicle
Coats is the world’s leading maker of threads. Demand is rising in Asia and the company is also tapping sustainability trends. Coats has a global footprint and a flexible supply chain. Buy (77p). Ryanair is Europe’s number-one airline in passenger terms, and is better equipped than its rivals to weather the sector’s volatility. The company is a good play on a travel recovery, with passenger numbers picking up. Buy (€13,66).
The Mail on Sunday
Mining-services firm Capital “makes most of its money digging for gold”. It’s benefiting from better sentiment towards the metal and looks “likely to continue in that vein for the next couple of years”. Buy (104p).
Shares
Rathbones’ appeal has been highlighted by the Royal Bank of Canada’s £1.6bn bid for rival wealth manager Brewin Dolphin. Buy (2,120p).
Shares
Drinks company Fever-Tree has strong global growth prospects and should benefit from bars reopening. The current squeeze on its share price could prompt a takeover from larger firms. Buy before they do (1,809p).
The Telegraph
InterContinental Hotels has significant potential as hotel operators begin to recover from the pandemic. Its strong financial position should allow it to weather any further shortterm challenges. Buy (5,206p).
The Times
Order levels are recovering at promotional products supplier 4Imprint. Sales could return to pre-pandemic levels this year and that hasn’t been factored into the shares. Buy (2,875p).
-
British Airways revamps Avios scheme bringing down flight prices to £1With the new Avios part-payments scheme you can now bag a British Airways flight for as little as £1
-
RBS to close a fifth of branchesRoyal Bank of Scotland plans to shut 18 branches across Scotland, resulting in the loss of 105 jobs. We have the full list of closures.
-
The industry at the heart of global technologyThe semiconductor industry powers key trends such as artificial intelligence, says Rupert Hargreaves
-
Three emerging Asian markets to invest inProfessional investor Chetan Sehgal of Templeton Emerging Markets Investment Trust tells us where he’d put his money
-
What to consider before investing in small-cap indexesSmall-cap index trackers show why your choice of benchmark can make a large difference to long-term returns
-
Why space investments are the way to go for investorsSpace investments will change our world beyond recognition, UK investors should take note
-
Time to tap into Africa’s mobile money boomFavourable demographics have put Africa on the path to growth when it comes to mobile money and digital banking
-
M&S is back in fashion: but how long can this success last?M&S has exceeded expectations in the past few years, but can it keep up the momentum?
-
The end of China’s boomLike the US, China too got fat on fake money. Now, China's doom is not far away.
-
Magic mushrooms — an investment boom or doom?Investing in these promising medical developments might see you embark on the trip of a lifetime.
