MoneyWeek’s comprehensive guide to this week’s share tips from the UK’s financial press.
Three to buy
Brewin Dolphin
Investors Chronicle
Stockbroker Brewin Dolphin has transformed itself into a fully fledged wealth manager, so its income now comes from recurring fees, rather than lumpy trading commissions. It has been selling off non-core assets while expanding its money-management business, and now boasts £34bn under management versus £32bn
six months ago. On 14-times earnings, the shares remain cheaper than rivals. 252p
IG Design
Mail on Sunday
IG Design is the world’s largest manufacturer of Christmas crackers and wrapping paper, supplying Tesco, Waitrose and Walmart. Chief Executive Paul Fineman, has shifted the product range downmarket, selling 500 million items a year at an average price of 55p each. Demand is resilient, profits are rising, the dividend is up and the business is gaining pace. 218p
Ryanair
The Daily Telegraph
Ryanair and its clownish boss Michael O’Leary are known for no-frills service, but the airline is getting better at customer service. “If I’d known being nicer to customers was going to work,” O’Leary says, “I’d have done it ages ago.” Sales are rising and he plans to boost passenger numbers from 117 million last year to 180 million by 2024. There will be turbulence, but Ryanair is good at over-delivering. €11.59
Three to sell
Anglo American
Investors Chronicle
Anglo is in the midst of a “radical restructuring”, having overstretched its balance sheet by pumping $13bn into an unprofitable mine in Brazil. Anglo has ditched its dividend and is cutting two-thirds of its staff, in an attempt to trim debt by $10bn before the end of the year. The shares have bounced with metal prices, making Anglo one of the biggest risers in London this year, but the rally is overdone. 883p
Johnston Press
The Sunday Times
Johnston Press, which publishes The Scotsman, The Yorkshire Post and the i newspaper, boasts 32 million readers every day. But the business is “next to worthless”, says The Sunday Times. Google is gobbling up its advertising revenue, while Rightmove and Auto Trader have hollowed out the classifieds market. Revenue is falling and the debt pile looks insurmountable. 10p
RBS
Shares
Hopes that RBS will reintroduce its dividend this year are “all but extinguished”, says Shares. The bank’s risk-weighted reserves and its capital buffers, two key measures of its financial solidity, have both shrunk quickly, suggesting RBS’s balance sheet could come under pressure. The prospect of negative interest rates makes the outlook for RBS even worse. 184p
And the rest
| Buys | |
| Alternative Networks | Shares in the IT firm have halved, but sales are rising (Investors Chronicle) 253p |
| Crawshaw | The Rotherham-based butcher is growing quickly (Shares) 84p |
| Greggs | Greggs does cheap food well and is rapidly opening new stores (Times) 1,048p |
| OPG Group | The Aim-listed coal-power group is boosting its dividends (Shares) 57p |
| Photo-Me | The photo firm is booming, thanks to an ID scheme in Japan (Investors Chronicle) 155p |
| Redcentric | Borrowing is due to start falling at the IT supplier (Shares) 178p |
| Sound Energy | The small oil firm is extending a tie-up with oil giant Schlumberger (Shares) 61p |
| Spirax-Sarco | Spirax-Sarco has grown dividends almost every year since 1960 (Shares) 3,981p |
| Sells | |
| B&M European | The budget retailer will see profits hit by a drop in sterling (Shares) 252p |
| Brammer | Debt is rising at the ball-bearing maker and its shares are sliding (Times) 95p |
| Nanoco | Shares in the smartphone supplier have moved up too quickly (Shares) 64p |
Directors’ dealings
Directors of Kenmare Resources, which operates a titanium mine in Mozambique, are running headlong into the stock. Chairman Steven McTiernan, finance director Tony McCluskey and four other directors have all bought shares in the last week, scooping up half a million shares between them worth £1.2m. Director Sofia Bianchi, a mergers and acquisitions expert, was the biggest buyer. Kenmare fended off takeover bids last year, but recent moves by its rival Iluka Resources suggest a deal could once again be on the radar.
A German view
Siemens is in fine fettle, says Börse Online. The engineering and manufacturing giant’s product range includes automation technology, wind-power equipment, electric motors and energy-efficiency management systems for buildings.
It has just announced a 5% rise in sales to €19.8bn for the third quarter, with new orders up by 6% to €21bn. The overall order book is now worth a record €116bn. The group has raised its earnings forecast for a second time this year, and now expects to earn €6.70 per share for the year to the end of September.
The group’s restructuring programme appears to be paying off, and it is fending off stiff competition, particularly in the energy technology sector. The stock also trades on a dividend yield of over 3%.