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
Walt Disney
Investors Chronicle
Marvel’s latest superhero offering, Avengers: Infinity War, is breaking box-office records and making Disney – which bought the comic-book franchise in 2009 for $4.2bn – very rich. Investors have been going cold on Disney because of Netflix’s dominance, but this is one of the world’s most loved brands, with an “immense library of film and TV content”. The launch of its own streaming service next year should take the fight to Netflix; the politically fraught acquisition of Fox could give it another boost. $102
Barclays
The Sunday Telegraph
The Serious Fraud Office is still investigating Barclays’ Qatari links and the PPI misconduct tap keeps dripping, but the bank’s share price underrates its potential. The purchase of Lehman Brothers’ defunct North American operation a decade ago gave Barclays a strong foothold with international corporate clients and Deutsche Bank’s recent investment-banking exit only strengthens its position. The dividend will more than double this year and barring any further mishaps there is value at the current price. 214.5p
Harvest Minerals
The Mail on Sunday
Brazil is one of the world’s great agricultural exporters, yet two-thirds of its fertiliser is imported from abroad. Brasília wants to build up more domestic capacity and Harvest Minerals is ideally placed to help out. Early sales of its cheaper organic fertilisers have been encouraging. A punt for the adventurous investor. 17p
Three to sell
Electronic Arts
The Daily Telegraph
Normally tech firms are the ones doling out the disruption, but this computer-games publisher is on the receiving end of a shift in the marketplace. Upstart challenger Epic – which is backed by Chinese giant Tencent – is undermining Nasdaq-listed Electronic Art’s lucrative business model that sees users pay to download games. If free-to-download becomes standard then the firm’s currently healthy revenues could start to sag. Take profits while the going is good. $122.53
BCA Marketplace
The Sunday Times
More than 50% of all cars sold at auction in the UK pass through the hands of BCA, which also owns WeBuyAnyCar.com. Profit and revenue have been growing strongly, but the business is piling up risk through its plunge into motor finance – with a loan book now totalling £123.7m. The car market looks fragile as new car sales go into reverse and rivals are snapping at BCA’s heels online. Lavish share awards to directors involved in a 2015 reverse takeover have also sparked concerns about corporate governance. 193p
Mpac
Shares
News of a management shake-up at this packaging-industry engineer provides an opportunity to assess the stock. Chairman Phil Moorhouse is stepping down after seven years, while the finance director has decided to move on too. The share price has soared since 2017 as the market realised that fears of a pension deficit had been overplayed
and the shares “no longer
look significantly discounted”.
Take profits and move on. 213p
…and the rest
The Times
Oil has surprised on the upside this year, enabling BP to think about increasing returns to investors (566.5p). Travel operator Tui’s shares are up 47% in the past year, but still buy for the 3.6% dividend yield (1,727.5p). A new boss at precision engineer Renishaw can rely on an experienced management team to back him (5,440p). Sporting results have benefited William Hill, but upcoming regulatory decisions mean that this bet is running out of steam (279.5p).
The Daily Telegraph
Adobe is famous for its PDF document format and its publishing and creative software has “no real competitors” ($232.70). Shrewd contrarians think there is money to be made in unloved UK utilities and National Grid fits the bill with a “fat yield” and US diversification (851p).
Investors Chronicle
A US building boom is good news for blue-chip construction equipment-hire firm Ashtead (2,061p). Business is picking up and margins are fattening, but life assurer Just still looks undervalued (142p). Niche software-solutions business SciSys, whose clients include the BBC and the European Space Agency, is a promising cheap growth pick (163p).
Shares
Engines maker Rolls-Royce is a great recovery play for long-term investors (836.5p). Strong demand for new houses and falling brick stockpiles should boost brickmaker Ibstock (299.5p). Analysts are cool on Next because of its large high-street store estate, but this is a “healthy business with a very long future” (5,252p). The motor-insurance sector has underperformed the wider market, but Direct Line’s 8.1% prospective dividend yield looks secure (369p).
A German view
Spain’s Viscofan is a world leader in making artificial casings for sausages and other meat products. Many consumers find casings made of collagen, cellulose and other man-made materials more appealing than traditional ones that use pig intestines, and the business enjoys high barriers to entry. The factories required to make the casings are very capital-intensive, which deters rivals, notes WirtschaftsWoche. The firm, which distributes its products in more than 100 countries, is also enjoying rising demand from emerging-market consumers, who are increasing their protein intake. Sales rose by 8% to €778m last year, when net income reached €122m. The shares offer a dividend yield of 2.6%.
IPO watch
iZettle, a Swedish payments and ecommerce group, is planning an initial public offering (IPO) at a valuation of 10bn Swedish kronor ($1.1bn), which would be the largest float by a European fintech company, says the Financial Times. iZettle is one of the fastest-growing companies in Europe and had a compound annual growth rate of 103% in 2013-2016. It started off providing card readers that plug into smartphones and has since expanded to offer tools for small businesses ranging from invoicing software to providing cash advances. iZettle reported a 51% jump in revenues to 966m kronor for 2017.