MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK press.
Three to buy
Allied Irish Banks
Ireland is in recovery mode. Other players quit during the banking crisis, leaving this bank as a dominant force in the mortgage and small-business loan markets. Banks are at the mercy of the economies in which they operate, so this is a bet on the Irish housing market and that Brexit will not hit it too hard – but Allied has good capital buffers and looks well placed to “cement its position as Ireland’s top bank”. €5
The Sunday Times
Investors have been betting that shopping centres are going out of fashion, but these fears look overdone. Retailers are certainly in a bad way, but many are gravitating towards big “destination centres” of the type operated by this property titan. The firm is trading at a 35% discount to the net asset value of its portfolio. 513.25p
The Mail on Sunday
The cosmetics supplier is developing its own brands, including Argan 5, Bagsy and MR Jamie Stevens. Last month the firm announced that pre-tax profits had more than doubled to £3.6m, and raised the dividend by 68%. George Soros has an 11% stake in the business – “buy and hold”. 337.5p
Three to sell
A savage dip in the share price suggests that investors think Auto Trader is “more Vauxhall Astra than BMW 5 series”. Falling new car registrations and worries about the sustainability of motor financing and consumer debt suggest a difficult path ahead for its classified advertising business. Yet the shares are still trading on more than 20 times this year’s forecast earnings. 360p
The Daily Telegraph
Shares in this education and publishing specialist have rallied, but it is too early to say that it is out of the woods. The share price dived in the past year following a profit warning and a dividend cut, but investors have been cheered by a reassuring trading statement and plans for a £300m share buyback. Yet total group sales fell by 2% on an underlying basis. That’s cause for concern. 695.5p
The eurozone’s biggest bank has weathered many storms that have beached its rivals: the financial crash, misconduct scandals and the failure of Spain’s Banco Popular earlier this year. Yet different political problems in each of its three biggest markets – Spain, Brazil and the UK – suggest trouble to come and a falling dividend yield means investors will cut it less slack. 516.5p
And the rest
The Daily Telegraph
The rise of professional e-sports may bring new revenue for digital games producer Electronic Arts ($114.47).
Supermarkets are simplifying their supply chains and expanding food-supplier Hilton Food Group looks like the perfect partner (835p). Offshore-drilling company ADES International trades at a discount ($13.20). Kettle safety-controls maker Strix combines growth prospects with a 5% forward dividend yield (139p).
The Mail on Sunday
Investors who bought into video-games group Keywords Studios when the Mail tipped it in 2015 should take some profits at current levels, but selling out completely would be a mistake (1,644p).
A string of acquisitions suggests good things to come from building materials company SigmaRoc (43.25p). Investors should wait for sentiment towards advertising business WPP to improve (1,372p). Photo-Me International is often overlooked, but is “highly profitable and awash with growth angles” (177p). Acquisitions are on the cards as digital-marketing technology supplier dotDigital looks to bolster growth (85p).
Information and analytics specialist Relx Group is a reliable stock, if a little pricy (1,720p). The arrival of a long-awaited takeover offer from Mediclinic increases the attractions of Spire Healthcare Group (300p). Shares in wealth manager St. James’s Place look fully valued – “take some money off the table” (1,171.75p).
An American view
Artificial intelligence, cloud software and autonomous cars have driven tech stocks to the stratosphere this year, says The Wall Street Journal. Taiwan Semiconductor Manufacturing. (TSMC), the world’s largest made-to-order chip maker, is set to benefit from wider trends in the sector. TSMC makes chips for those without their own manufacturing plants, and is the sole manufacturer of the Apple-designed A11 chip that goes into the newest iPhones. The firm saw an 18% revenue increase in the last quarter compared with the prior one, boosted by iPhone sales and by cryptocurrencies. Nvidia and AMD, whose graphics chips are used by “miners” of cryptocurrencies, are clients of TSMC. The shares have risen 32% this year, yet remain cheap at 17 times forward earnings.
Arqiva, the owner of 16,000 television, radio and mobile-phone masts across Britain, has announced plans to go public next month after talks with a range of buyers led by Brookfield Investments failed to result in a sale two weeks ago. With an estimated market value of £6bn including debt, it is reportedly the biggest initial public offering (IPO) in London this year.
The firm is looking to raise around £1.5bn to pay down £600m of debt, a move that will cut its interest costs by £57m a year. More than £2.5bn of shareholder loans will also convert into equity. The Hampshire-based firm, which is expected to enter the FTSE 100 once it floats, connects more than 19 million homes in Britain. It reported revenues of almost £1bn and profits of £567m for the year ended 30 June.