Three to buy
Bank of Georgia
The Sunday Telegraph
Bank of Georgia is based in a country that has faced both a revolution and a war with Russia since the millennium. As such, the company has faced some real-life “stress tests”. But Georgia’s economy is now growing at 6.5% a year, and the group controls a third of the local banking market. It listed in London in 2012 and has rewarded investors with a growing loan book and rising profits. The shares look cheap on less than twice this year’s net asset value, although there are obvious geopolitical risks to consider. 1,927p
An increasing number of businesses and public-sector organisations are outsourcing their IT infrastructure to third parties such as Iomart, which provides cloud storage from data centres around the UK and is expanding overseas. Companies tend to stick with a good IT supplier once they’ve found one, which means high levels of recurring revenue. Recent annual results revealed a 7% jump in underlying profits, while FinnCap analysts have recently increased their target price for the shares to 450p. 390.5p
The Mail on Sunday
This specialist building-services firm is divided into four divisions – access and safety, electrical services, building access and fire solutions – specialised work that is often mandatory under health and safety regulations. A focus on safety in the aftermath of the Grenfell Tower disaster has bolstered demand for many of its services. A small dividend probably won’t pull in income investors, but this is a growth stock for the long-term. 178p
Three to sell
This media outfit announced the acquisition of marketing intelligence business WARC for £24m earlier this month, marking its transition from asset seller to asset buyer. The deal should be “immediately earnings enhancing” and will help the management’s plans to diversify its online operations. Shares in the owner of the Cannes Lions advertising festival hit an all-time high in June, yet with some analysts raising doubts about growth prospects, Shares magazine thinks now could be a good time to take some profits. 428.5p
Domino’s and its franchises already command about 46% of the UK pizza market, but the chain is expanding. The strategy is gobbling up capital and there are fears that new stores could cannibalise the sales of existing operators. The FIFA World Cup may provide a short-term boost to the shares, but Investors Chronicle recommends selling before the market gets wise to a business that has sacrificed margins for growth overseas and is exposed to competition from the likes of Just Eat at home. 346p
The Sunday Times
Rupert Soames, Winston Churchill’s grandson, was appointed to turn this flagging outsourcer around, but four years later, the share price has refused to budge. A partial rally in 2016 was stuffed out by problems at peers Carillion and Mitie, whilst paralysis in Whitehall has limited the number of new government contracts on offer. Management is shifting its focus overseas, but progress is “agonisingly slow”. Avoid. 97p
…and the rest
The Daily Telegraph
Prospects for profitability have been underrated at chemicals group Johnson Matthey’s catalytic-converter division (3,725p). The clampdown on fixed-odds betting terminals has weighed on bookies, but William Hill has a “terrific foothold” stateside and could attract a bid (312.5p).
Supermarket Tesco’s recovery is looking even more promising after its merger with wholesaler Booker (256p). Argentine shale operator Phoenix Global Resources is a speculative play that could come good (19.5p).
The Mail on Sunday
Yorkshire-based Sirius Minerals mines agricultural fertiliser polyhalite. It won’t begin commercial production for a few years, but momentum is building (31.5p).
Private-equity firm BP Marsh has a “stellar record” and will have greater firepower after an upcoming fundraising (283p). There is more upside to come at engine-maker Rolls-Royce (919p). Despite headwinds in China, waste-management firm Biffa looks “really great value” (248.5p). Two acquisitions in Zimbabwe could spur growth at chrome and platinum miner Tharisa (110.5p). GVC’s scale and online expertise make it an attractive bet on the gambling sector (1,023p).
Insurer Legal & General will benefit from pension auto-enrolment (267.5p). Margins are under pressure at shoe retailer Footasylum, while brands prefer to sell direct to the consumer – sell (80p). Royal Dutch Shell’s operations will prove robust even at a lower oil price (2,661p).
A German view
Leoni, one of the world’s top suppliers of cables, wires and wiring systems, is on a roll. The German mid-cap stock, whose products are used in everything from vehicles and healthcare to mobile networks and wind turbines, is on track to exceed €5bn in sales this year, following a 9% annual jump in turnover in the first quarter. The shift towards electric vehicles is helping its core business, says WirtschaftsWoche. The order book has grown to €22bn; electric cars account for €4.5bn, with orders tripling in the past year. Leoni’s recent emphasis on “intelligent cables” – which can monitor their own temperature and pressure to pre-empt any problems – also looks promising. The stock yields 3%.
Chinese smartphone maker Xiaomi is planning an initial public offering (IPO) in Hong Kong that could raise between US$4.7bn and US$6.1bn, valuing the company at between US$53.9bn and US$69.8bn. The IPO would be the third biggest globally in the last three years, reports Nisha Gopalan on Bloomberg; only the Postal Savings Bank of China and Alibaba Group brought in more, at US$7.6bn and US$25bn respectively. Xiaomi had initially hoped to list in both Hong Kong and Shanghai, but decided to postpone its mainland issue after problems with the introduction of Chinese depositary receipts (CDRs), which allow firms listed overseas to be traded on Chinese exchanges.