Three to buy
Gore Street Energy Storage
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
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).
-
FCA car finance compensation: £700 each expected for 14 million driversEligible motorists could begin getting a payout from next year under the financial watchdog’s planned car finance compensation scheme
-
Reeves warned against property tax shake-up – 3 ways it could backfire on first-time buyersRachel Reeves reportedly has her eye on high-end property taxes in the upcoming Budget, but there are concerns a shake-up could unintentionally hamper those trying to get on the housing ladder
-
Pierre-Édouard Stérin wants to make France great againConservative billionaire Pierre-Édouard Stérin is seeking to lead a political and spiritual renaissance across the Channel. The planning looks meticulous
-
Global investors have overlooked the top innovators in emerging marketsOpinion Carlos Hardenberg, portfolio manager, Mobius Investment Trust, highlights three emerging market stocks where he’d put his money
-
Pinewood Technologies: a drive for growthPinewood Technologies’ platform is one of the best in the business. Investors should buy in
-
'EV maker Faraday Future will crash'Faraday Future Intelligent Electric is failing dismally to live up to its name, says Matthew Partridge
-
Investors should cheer the coming nuclear summerThe US and UK have agreed a groundbreaking deal on nuclear power, and the sector is seeing a surge in interest from around the world. Here's how you can profit
-
8 of the best houses for sale with folliesThe best houses for sale with follies in the grounds – from a five-storey Victorian Gothic tower in Tonbridge, Kent, to a former mill in Oxfordshire with gardens that include a folly on an island in a lake
-
A tale of two Reits – why performance matters for valuationAEW UK and Regional are two Reits that are valued very differently, despite a shared focus on properties outside London
-
Healthcare stocks look cheap, but tread carefullyShares in healthcare companies could get a shot in the arm if uncertainty over policy in the US wanes, but are they worth the risk?
