MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK’s press.
Three to buy
Churchill China
Investors Chronicle
A 15% share-price decline over the past three months represents a rare opportunity to buy into this heritage ceramics manufacturer. It is expanding into international markets, with the booming global hotel industry fuelling strong demand. “It’s time to buy British.” 895p
Rank Group
The Times
Mecca Bingo and Grosvenor Casinos owner Rank has avoided the “merry-go-round” of mergers in the gaming sector in recent years and is well placed to grow from its digital operations, which should offset the shrinking demographic for bingo halls. 225p
T Clarke
The Mail on Sunday
The proliferation of electronic devices in people’s pockets and electronic control systems in commercial buildings means there is more electrical work going around than ever. This 128-year-old electrical-services business has electrified everything from the Tower of London to the Shard. The order book is strong, while the business model is built on long-standing relationships. The shares look undervalued. 76.5p
Three to sell
Countryside Properties
Shares
This housebuilder has had a strong run since Shares tipped the stock earlier this year, but sentiment is now turning against the sector. House prices are stalling and there are reports that the government will end the help-to-buy scheme early. Countryside’s work helping housing authorities regenerate public land is a plus, but in sum “it is worth booking some profit”. 355.25p
Epwin
Investors Chronicle
Shares in the building-products manufacturer fell 16% on news that full-year profits will come in below market expectations. Sterling weakness has increased the firm’s cost base just as some of its biggest customers are shifting suppliers, putting about 10% of total group revenue at risk. With the dividend yield now at 8.3%, there is ample scope for a cut. 79p
Next
The Sunday Times
Next has become the latest high-street stalwart to try “inventive” ways to keep shoppers coming through the doors. Yet this just obscures the fact that the “sprawling… estate” has become a millstone. Store space has increased by 71% in the past ten years, but store revenues have grown by just 2% in the same period. What’s more, the company’s online operation remains behind the curve. 4,149p
And the rest
The Daily Telegraph
Latin American e-commerce retailer MercadoLibre could be the next Amazon ($236.45). Messy interims and high debts mean that investors should avoid outsourcing group Interserve (194.5p). Problems at its East Coast rail franchise are turning into a costly “worst-case scenario” for Stagecoach (177p).
Investors Chronicle
With e-commerce growing and demand for distribution centres outstripping supply, logistics real-estate investor Tritax Big Box is in the right place at the right time (148.5p). Strong admissions growth and new locations suggest big potential at Cineworld (723p). The diamond market has had a soft 2017, but a low rating at Petra Diamonds “comes with the potential for big returns” (99p).
Shares
The food-on-the-go market is highly competitive, but baker Greggs has room to expand (1,177p). Sub-prime lender Non-Standard Finance is consolidating a fragmented market and pays a healthy dividend (66.75p). Fledgling cash shell Spinnaker Opportunities is high-risk, but worth a look ahead of likely acquisitions in the oil and gas sector (4.5p).
The Times
Admiral’s shares have fallen on the back of changes to compensation rules, but markets are overlooking the insurer’s overall financial strength (1,993p). Prospects at startup investor Allied Minds are so speculative that the shares are “for gamblers” (160p). Steer clear of motor dealership Lookers: the car market outlook remains uncertain (106.75p).
A German view
Water, energy and waste disposal are all long-term growth markets given the rapidly expanding global population. Enter Veolia, which is profiting from all three sectors, says WirtschaftsWoche. It produces drinking water for more than 100 million people and its wastewater division serves more than 60 million. It is also a major energy and waste disposal services provider, recently clinching the contract to build and run a rubbish incineration and electricity-generating plant in Mexico City – the first waste-to-energy facility in Latin America. Sales in the developing world are rising at a double-digit pace, while specialised waste-management services, such as getting rid of toxic waste and decommissioning old power plants, are buoying the European division. The stock offers a 4% dividend yield.
IPO watch
Data-sharing business Dropbox is reportedly working with Goldman Sachs to prepare an initial public offering (IPO) that could happen as early as this year. If so, it‘s likely to be the biggest tech IPO since Snapchat parent Snap floated in March 2017, say Dina Bass and Alex Barinka on Bloomberg. Dropbox was established in 2007 and has gained a loyal following from people looking to store photos and other files in the cloud, making them available from any computer or mobile device. It rode this wave to a $10bn valuation in early 2014, making it one of Silicon Valley’s most valuable unicorns (startups worth over $1bn). Today, it boasts 500 million users, including 200,000 businesses, and is on track to generate $1bn in revenue this year.