Six to buy
This copper, platinum group metals (PGM) and potash mining giant is cheap, at only eight times forecast earnings for the next 12 months. The firm plans to expand copper production by 35% from 2021 levels by 2030. This should help to meet rising demand caused by the electrification of the global economy and could even make miners more acceptable to investors who focus on environmental, social and governance (ESG) issues. A scramble for non-Russian PGM supplies should also boost sales and margins. 4,148p
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The owner of the Tango, Robinsons’ and Purdey’s soft-drinks brands offers a potent mix of capital growth and income. The pandemic saw consumption in pubs decline, but the firm’s latest quarterly update reported year-on-year revenue growth of 16.5% since the easing of restrictions. Since 2020, the company has purchased plant-based drinks manufacturer Plenish and expanded its partnership with Pepsi. It’s not immune to rising costs and inflation, but still managed to grow operating margins in 2021. Consumers are unlikely to stray from favourite drinks brands even as prices increase. 821p
Cybersecurity firm Darktrace has raised its guidance for the fifth time since listing. The firm, which uses behavioural analysis to detect the early signs of a cyberattack, is well-placed in a critical sector: the US cybersecurity market was valued at $156.5bn in 2019 and is expected to grow to $326.4bn by 2027. Darktrace is delivering rapid growth – annual recurring revenue of $462.6m is up by 46% year-on-year. The shares have been volatile as investors fret over inflation and rising interest rates, but could fly once markets calm down. 375p
Shares in Britain’s biggest brickmaker have been in for a rough spell amid fears of rising fuel costs owing to the invasion of Ukraine and post-pandemic supply bottlenecks. But results for the year to March for 2021 were positive. The firm is seeing strong demand for bricks for new houses and stands to profit from the removal of dangerous cladding from flats. It’s “well-placed to overcome multiple headwinds” and looks cheap on a price/earnings ratio of less than 12 times forecast earnings. The yield is 4.25% and a £30m share buyback has just been announced. 181p
The Sunday Times
Jet2’s share price plummeted 72% over the course of the pandemic and it is expected to announce a £378m loss for 2021. Yet the low-cost airline and package-holiday firm was praised for treating customers well, with an efficient refund policy, and they haven’t forgotten. Jet2’s load factor – the percent of full seats on flights – is just 2.5% behind summer 2019 levels, despite a 14% increase in seat capacity. It stands apart from its budget rivals financially, with more than £1bn on its balance sheet, yet shares remain well below their pre-Covid peak of £19. Buy before they soar. 1,271p
Tortilla Mexican Grill
The Mail on Sunday
This fast-food chain specialises in made-to-order burritos and tortillas. It was founded in 2003 and now has 59 stores at home and abroad. The shares have fallen by almost 10% since listing in October, but the decline seems unjust. Sales are forecast to rise by 20% to £57m in 2022 and exceed £78m by 2024, with profits reaching £3.8m and £5m respectively. Comparatively low energy costs and reasonably priced meals put it in a better position to weather inflation than some rivals. 163p
...and the rest
UK Commercial Property Reit manages a £1.57bn portfolio of 40 properties. These are largely industrial real estate, where demand is outstripping supply. It has scope to raise rents ahead of inflation. Buy (92.5p).
The Mail on Sunday
Emmerson is developing a major potash mine in Morocco. Potash prices have soared from $400 per tonne to $1,200 because 40% of supply comes from Belarus and Russia. No mining development project is risk-free, but this site is well located. Buy (7.5p).
Telecoms group Airtel Africa has 125 million customers, 45 million data subscribers over 14 countries and a payments service with 26 million users. The firm has seen 16 consecutive months of double-digit revenue growth and rising margins. Buy (146p).
Consumer goods firm Reckitt Benckiser owns brand such as Durex, Dettol and Calgon. It’s well-placed to pass input costs onto loyal customers and may even be able to grow margins. Buy (6,138p).
Shares in Anglo American dropped 8% after weather and Covid-19 disrupted production. But its diversified portfolio of metals and high dividend yield provide strong defensive strength. Buy (3,679p). Bunzl distributes everything from first-aid kits to coffee cups. Sales should grow by 7% this year, up from 2% last year, despite a decrease in spending on hand sanitiser and masks. Buy (3,025p). Central London office-landlord Helical has been hit by fears that Brexit and Covid-19 will permanently hurt demand. But its 25% discount to estimated net asset value prices in the risks. Buy (434p). The outlook for Netflix is weakening as the boost from lockdown fades. Avoid ($259).
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