Share tips of the week – 1 July
MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
Three to buy
CVS
Investors’ Chronicle
Dogs are for life, and so are their vets’ bills. CVS is one of six large firms that control half the UK veterinary market. It owns more than 500 veterinary surgeries, three laboratories and seven crematoria across the UK, the Netherlands and the Republic of Ireland. New management has shifted its focus from mass acquisitions to organic growth, upped its spending on facilities, and made an “impressive dent” in its debt. Operating profit tripled in the five years to June 2021 and is expected to climb a further 25% this year. Competition in the sector has sent the shares down by around a quarter since the start of the year, but demand looks set to remain high. 1,592p.
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
Games Workshop
Shares
This fantasy games and figurines maker thrived in the pandemic as people invested in their hobbies, but has suffered from the growth stock sell-off. However, core sales for the year just ended are set to be at least 9% higher than the previous year’s record £353m, while royalties jumped 72% to £28m. It has an “unlimited scope” for innovation and “many different growth avenues”: it’s bringing out several video games this year. 6,045p.
Procter & Gamble
The Sunday Telegraph
Customer loyalty to P&G’s brands, which include Head & Shoulders shampoo and Fairy Liquid washing-up liquid, should enable it to pass on inflation to consumers without hurting sales. The company has a record of stable, growing returns and further growth potential thanks to “premiumisation” trends (consumers trading up to its more expensive brands). It’s a “very high-quality company that merits purchase”. $143.74.
Three to sell
CareTech
Investors’ Chronicle
Specialist social-care provider CareTech was affected by staff vacancies caused by Covid-19. It resorted to hired agency staff, which meant increased costs. Half-year results showed modest growth in revenue, flat profits and rising debt due to acquisitions. The company’s co-founders are seeking financing to allow them to take it private, and as a result it will not pay an interim dividend. There are two 750p offers, but talks are progressing slowly. Sell. 630p.
Naked Wines
The Times
Online wine retailer Naked Wines posted decent results for the year to March. Sales were up £10.1m, profit was up £6.2m and pre-tax profit increased to £3m from a £500,000 loss last year. However, the CEO raised the possibility of a loss for the 2022-2023 financial year. Even more concerning was the possible breach of the firm’s $60m asset-backed lending facility. There is too much uncertainty surrounding the business and management has warned the path to its goal “will not be linear”. Avoid. 156.2p.
Tekmar
The Telegraph
Tekmar, a supplier of protection systems for undersea pipes and cables, should have benefited from the increased investment in wind power. However, the company has “struggled to turn that potential into cash” and is now in a delicate financial positions. It’s still winning big contracts, but the market is showing doubts about its ability to return to profitability. Bosses have “acknowledged its plight” by putting it up for sale – and not from a position of strength. Some investors might want to hang on, but others should “take what little is on the table now and sell”. 8.25p.
...and the rest
The Sunday Times
Alternative asset manager Gresham House is “proving money can grow on trees”. Assets under management jumped 65% to £6.5bn last year, thanks in part to the £3bn of commercial timberland that it now manages. The sustainability-focused firm is small, but its chief executive “has shown his prowess”. Buy (823.3p).
The Telegraph
Gold is a “traditional safe haven” in periods of inflation, but surprisingly it hasn’t shot up recently. However, there are good reasons to expect its price to rise, as supply is “all but certain to fall” and investment demand should rise. Miner Newmont is focusing on making its operations more efficient. It has a free cash-flow yield of 5%, “a large proportion of which should go back to shareholders”. Buy ($65.17).
The Times
Housebuilder Berkeley might not “entirely avoid the perils of a UK economy in its current shape”, but this is “likely to take the form of a pause rather than an outright setback”. It has a “well-executed, sound long-term strategy”, which should shield it from short-term volatility. Buy (3,837p). Cable maker Volex’s “position near the technological cutting edge” should shield it from “macroeconomic headwinds”. The firm’s “well-motivated and experienced management” looks able to fulfil its potential. Buy (240p). Micro Focus helps its customers make the most of their IT systems. However, this is one of the first things to go when businesses start “battening down the hatches”. It’s a good company, but it’s operating in a bad environment. Sell (306p). Utilities reseller Telecom Plus’s new bundle offers provide customers with cheaper deals. This “new-found edge is already seeping through to the bottom line”. Debts have improved and profits could accelerate. Buy (1,950p).
Sign up to Money Morning
Our team, led by award winning editors, is dedicated to delivering you the top news, analysis, and guides to help you manage your money, grow your investments and build wealth.
-
8 of the best properties for sale with smallholdings
Eight of the best properties for sale with smallholdings – from a 17th-century farmhouse in the Deben Valley, Suffolk, to a property set in 36 acres on the slopes of the Preseli Hills, Pembrokeshire
By Natasha Langan Published
-
US election – is the Trump Trade back?
The US election is around the corner. How does Trump influence US markets?
By Alex Rankine Published
-
Halifax: House price slump continues as prices slide for the sixth consecutive month
UK house prices fell again in September as buyers returned, but the slowdown was not as fast as anticipated, latest Halifax data shows. Where are house prices falling the most?
By Kalpana Fitzpatrick Published
-
Rents hit a record high - but is the opportunity for buy-to-let investors still strong?
UK rent prices have hit a record high with the average hitting over £1,200 a month says Rightmove. Are there still opportunities in buy-to-let?
By Marc Shoffman Published
-
Pension savers turn to gold investments
Investors are racing to buy gold to protect their pensions from a stock market correction and high inflation, experts say
By Ruth Emery Published
-
Where to find the best returns from student accommodation
Student accommodation can be a lucrative investment if you know where to look.
By Marc Shoffman Published
-
Best investing apps
Looking for an easy-to-use app to help you start investing, keep track of your portfolio or make trades on the go? We round up the best investing apps
By Ruth Emery Last updated
-
The world’s best bargain stocks
Searching for bargain stocks with Alec Cutler of the Orbis Global Balanced Fund, who tells Andrew Van Sickle which sectors are being overlooked.
By Andrew Van Sickle Published
-
Revealed: the cheapest cities to own a home in Britain
New research reveals the cheapest cities to own a home, taking account of mortgage payments, utility bills and council tax
By Ruth Emery Published
-
UK recession: How to protect your portfolio
As the UK recession is confirmed, we look at ways to protect your wealth.
By Henry Sandercock Last updated