MoneyWeek’s comprehensive guide to this week’s best share tips from the rest of the UK’s financial press.
Three to buy
Jupiter Fund Management
The asset manager reported £1.3bn of net inflows in the first quarter – the highest level of net new business since its initial public offering (IPO) in 2010. Peers have had wobbles since the EU referendum, but Jupiter’s efforts to diversify its assets and geographical exposure have kept it in fine fettle. The firm should also benefit as structural changes to the pensions market create new opportunities. 474.75p
The Daily Telegraph
The Tory party’s proposed crackdown on energy firms could prove a boon for this FTSE 250 multi-utility provider, while a business model that bundles energy with broadband and telecoms is looking ever more attractive. Recent investment spending means that buyers may have to wait until 2019 for earnings to pick up, but a 4.2% dividend yield means they are being paid to wait. 1,220p
Venture Life Group
The Mail on Sunday
Venture Life makes healthcare products for the over-40s market, and is best known in the UK for UltraDex mouthwash and toothpaste. It has lost almost half its value since listing three years ago, but the shares are now “worth a punt” as affluent older consumers drive growth. 58.5p
Three to sell
Doubts about Brexit and the Trump administration imply a cloudy outlook for the equities and derivatives trading-platform supplier. The firm is a global leader in its field with a “virtually bullet-proof balance sheet”, but a price/earnings ratio of 25.4 will start to look unjustifiably high if challenging financial markets begin to “grind Fidessa’s already limited growth to zero”. 2,401p
The shares in this drug maker are worth almost three times as much as they were when it was split from Reckitt Benckiser in 2014. Yet the firm has only one product – Suboxone, which is used to treat opioid addition. It awaits a crucial regulatory decision in the US and authorities are looking into claims of anti-competitive behaviour. Now may be a good time to take profits. 326p
The Sunday Times
This fashion retailer paid its maiden dividend last year, but could be hit by inflation and a slowdown in spending. The brand must make sure it doesn’t go the same way as French Connection – once cool but then “yesterday’s brand”. It wants to target older consumers, but that is risky. “Which self-respecting teenager wants to be seen wearing the same brand as his dad?” Avoid. 1,575p
And the rest
The Daily Telegraph
Newly listed investment trust Pershing Square will get a boost from index fund purchases if it is promoted into the FTSE 250 next month (1,221p). Recent trading figures from used-car dealer Motorpoint provide encouragement (163.25p).
Clothing retailer Moss Bros offers steady growth and a 6.5% forward dividend yield (100p). Xeros Technology, which helps commercial launderers to use less water and energy, is worth a punt (290p). Aim-listed San Leon Energy remains cheap despite talk of a takeover (49p).
Estate agent Purplebricks is expanding into the US, which could transform the firm (307.75p). Amino Technologies provides TV set-top boxes and cloud services to telecom companies and should profit as TV viewing shifts online (212.75p). UP Global Sourcing specialises in reviving distressed British brands and could prove a rare retail winner (178p). A new supply deal is reason to feast on butcher and retailer Crawshaw (30p). Special dividends at property regeneration firm U and I mean a 9.3% dividend yield this year (193p).
Software firm Sage may be dull, but that is a positive in a sector prone to shocks (707p). Demographic drivers make medical products maker Convatec a long-term buy (295p). Shares in Bovis Homes look cheap, but are best avoided after a scandal about paying buyers to move in early to inflate sales figures (945.5p).
An American view
“The backdrop for Mohawk remains bright,” says Jack Hough in Barron’s. The world’s biggest flooring company is benefiting from the rebound in the American housing market: single-family housing starts have hit their highest level in almost ten years, and home-improvement bellwether companies Lowe’s and Home Depot are doing well. Mohawk, which made sales worth $9bn in 2016, two-thirds of them in the US, has kept up with changing fashions by diversifying away from carpets into ceramic tile, laminate, wood stone and vinyl flooring. Luxury vinyl tile, which can look just like wood or stone but costs less and has better stain resistance, is the “market’s sweet spot”, and much of the company’s recent investment has been in this segment. Earnings per share rose by 24% last year.
London-based mattress maker Eve Sleep has announced it is to float on Aim. Eve was launched in 2015 and to date has raised £17m in funding from investors, including Channel 4, Neil Woodford and Octopus Ventures. Details of the IPO are scant, but it is believed to be looking to raise £35m, reports Business Insider, which would value the company at around £200m. The mattress business is the latest sector to be “disrupted” by internet newcomers. Eve is joined online by Simba Sleep, which earlier this year raised £9m from City investors; and US startup Casper, which is backed by Leonardo DiCaprio. All offer a similar “bed in a box” product delivered to your home, and a 100-night trial period with your money back if the mattress doesn’t live up to expectations.