The stocks and shares the British press is tipping – and recommending you avoid – this week.
Three to buy
Standard Life
The Daily Telegraph
Insurance stocks are reeling. The sector was already under pressure from falling bond yields, adding to a shortfall in their ability to meet generous life insurance policies issued in the past. But the EU referendum vote was the “final straw”, pushing ten-year government bonds’ yields in the UK to a record low of less than 1%. Standard Life is the hardest hit, falling 39% in the last year. Based in Edinburgh, it is doubly vulnerable to a break up of the UK. But negotiations will take time and the dividend yield of 7% suggests the sell-off is overdone. £2.88
Joules
The Mail on Sunday
Fashion group Joules was founded 27 years ago by Tom Joule, who started selling bright pink wellies at country fairs. It now has 100 shops in coastal and market towns, including Padstow and Dartmouth, but it avoids city centres, where rents are high and competition is fierce.
Joules makes 20% of sales online and it also has a wholesale division, selling to Next and John Lewis. Brexit has dragged down its shares from 190p to 171p, but well-to-do young couples who buy the company’s products are likely to shrug off any short-term economic shockwaves and the company is planning a dividend from 2017. £1.71
Victrex
Shares
Chemicals group Victrex is an exceptional UK business, but most of its sales are overseas, giving it an extra boost as sterling falls. Victrex is the world’s largest producer of PEEK resin, a hard-wearing type of thermoplastic that is used in everything from aerospace parts to gear boxes. Earnings will rise 1% for every 1% drop in the pound, according to broker estimates. Victrex, meanwhile, recently completed an £80m investment in bumping up its production capacity, so free cash flow will spike as sales rise and spending drops. £14.40.
Three to sell
Time Out
Shares
Founded by a university student in the 1960s as a counter-culture rag, Time Out is now an established title for event listings and reviews, but it has had a lukewarm reception from the market since listing in June. The company hopes to grow its online presence, but print advertising revenue is falling, and the business will remain “in the red” for the “foreseeable future”. £1.27
Marshalls
The Times
Marshalls, which sells materials such as patios to the building trade, faces “uncertainties ahead”. Dire figures for activity in the UK’s construction industry were already weighing on sentiment and Marshalls is exactly the sort of domestic-facing business that will suffer if Britain’s economy falters. The shares have fallen, but not enough. £2.13
Euromoney
Investors Chronicle
Investors in Euromoney should “head for the exit”. The publisher sells information and events to the financial services industry and two-thirds of its revenue comes from investment bankers. But falling markets, regulatory fines and rising compliance costs are all weighing heavily on the financial sector, which is tempering demand for Euromoney’s products. £9.15
And the rest
| Buys | |
|---|---|
| CVS Group | The veterinary group is growing as families splash out on pets (Mail) £7.48 |
| Belvoir | Rental demand will remain robust after Brexit result (Investors Chronicle) £1.26 |
| B&M | Discount retailers will thrive if Brexit tips Britain into recession (Sun. Times) £2.34 |
| Rightmove | The shares have been hammered, underrating the growth potential (Shares) £35.04 |
| Persimmon | The house builder has surplus cash and is paying it to shareholders (Times) £13.30 |
| RIT Capital | The Rothschild family vehicle thrives when markets suffer (Invest. Chr.) £15.72 |
| Staffline | Recruitment agencies could thrive if unemployment moves higher (Times) £7.75 |
| Cairn Energy | Cairn is a rare beast: a low-risk oil firm with ample cash (Invest. Chr.) £1.90 |
| Portmeirion | The pottery brand will bounce back after sales dipped in Korea (Invest. Chr.) £9.33 |