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
Tate & Lyle
Having moved on from its roots in sugar, today Tate & Lyle is a global supplier of corn-based sweeteners and starch ingredients, as well as the Sucralose zero-calorie sweetener. It is well placed to take advantage of consumers’ growing appetite for plant-based proteins. The business has scope to expand margins and earnings upgrades could follow. A prospective price-to-earnings (p/e) ratio of 13.7 looks undemanding and a 4.2% dividend yield is a further attraction. 727.25p
Pure Gold Mining
The Mail on Sunday
Talk of a US recession is prompting growing interest in gold, the ultimate safe-haven asset. This Canadian operator is developing a mine at Madsen Red Lake in Ontario and listed in London in May. Local infrastructure and expertise make the province an excellent location to mine. Production is expected to begin by the end of next year, and by 2022 annual output should hit more than 100,000 ounces. In a further vote of confidence, the company counts both AngloGold Ashanti and Newmont Goldcorp as shareholders. 41p
The Sunday Telegraph
Recent half-year results at this consumer goods company were a reminder that emerging markets remain a key driver of performance. Sales in the world’s fastest-growing markets rose 6.2%, compared with a 0.7% slump in developed markets. With China and India still producing world-beating growth there should be more to come. The group’s wide range of brands provides welcome diversification at a scary time for the global economy. 5,011p
Three to sell
Gooch & Housego
This photonics specialist makes optical components and systems used in aerospace and scientific research. The US-China tariff dispute has hit demand for lasers and prompted a profit warning in June. Capital returns and profit margins have “edged down” over the last five years. A life-sciences division gives long-term hope, but the elevated forward p/e ratio of 22 will come under pressure before then. 1,145p
In the fast-changing world of entertainment the traditional television industry is racing to catch up. The UK’s largest commercial broadcaster is pinning its hopes on BritBox, a joint venture with the BBC billed as the UK’s answer to Netflix. With advertising sales down 5% in the first six months ITV needs its content operation to pick up the slack. Yet with Apple and Disney set to launch their own streaming services, this market is becoming crowded. As shares flirt with six-year lows, the precise path ahead is uncertain, but that it will be bumpy is “as certain as a Piers Morgan rant on Good Morning Britain”. Avoid. 105.75p
The Daily Telegraph
We had been betting on a turnaround at this specialist manufacturer of chains, gears and power transmission systems. But an investigation has found that operating profit has been overstated by £1.8m over three years. This represents only 10% of last year’s operating profit, yet “health inspectors rarely find just the one cockroach”. On six times earnings the stock looks cheap, but we will sell until there is more clarity. 22.5p
…and the rest
The Daily Telegraph
Franchise Brands, whose franchisees run diverse plumbing, car-body repair and dog-sitting businesses, has a proven management team (83.5p).
An expectation-beating trading update suggests that luxury fashion house Burberry is “unlikely to go out of style” for investors anytime soon (2,107p). Secure Trust Bank is “nimbler” and more defensively positioned than bigger banking giants and offers a 6.3% forward dividend yield to boot (1,350p).
The Mail on Sunday
Shares in Azerbaijan-based Anglo Asian Mining have more than tripled in less than a year. Some profit-taking might be in order, but a rising gold price should continue to underpin gains (138p).
The mass of compliance and red tape grows ever thicker. Governance software business Ideagen is therefore in a compelling structural growth market (142p). Solid first-half results and client wins mean that we are still betting on a turnaround at advertising giant WPP (981.25p). Trouble in the global car industry is bad news for specialist automotive play TI Fluid Systems, but on a forward p/e ratio of 6.4 we think it is worth “holding tight” (160.5p). Engine problems have made it a difficult summer for shares in Rolls-Royce, but we remain confident that these are only short-term problems (733p).
Tougher regulation has hit online bingo operator JPJ Group, but it boasts strong cash flow and could become a takeover target (654p). Big-six energy firm SSE plans to dispose of its household supply business, but boasts “compelling” offshore prospects in wind power (1,109.5p).
A German view
The town of Grasse, in Provence, is known as the global capital of the perfume industry, says Wirtschaftsoche. It is also the headquarters of Robertet. This family-run company (the Maubert family, which set the business up in 1850, owns 43% of the stock) is the world leader in natural fragrances and flavours for the perfume, cosmetics and food sectors. The shares have risen steadily in recent years, and there is ample scope for further gains given the long-term growth prospects of the industries Robertet serves. Last year sales climbed by 4% to €525m, while earnings reached €52m; growth should continue at this pace. The balance sheet is very solid, with no net debt.
Chinese online grocery and delivery group Dada-JD Daojia is planning to float in the US, says Emma Lee on technode.com. The group is seeking “more ammunition to maintain its foothold in an increasingly competitive online grocery market”. Its key rivals include ele.me, Meituan and FreshMarket. The biggest shareholder in the venture is e-commerce giant JD.com, while Walmart owns 10%. Dada-JD Daojia has 74 million users and works with thousands of retailers, notably Walmart, Carrefour and Vanguard. During this year’s mid-year shopping festival known as 618 (held from July 18 to August 14), the platform produced year-on-year sales growth of 100%.