MoneyWeek’s comprehensive guide to this week’s share tips from the rest of the UK’s financial press.
Three to buy
Sirius Real Estate
The Mail on Sunday
The German property market is “considered the most promising in Europe” and its lustre is likely to only increase as firms shift operations to Germany in advance of Brexit. Investors can buy in through Sirius, which owns and manages 44 business parks in Germany and is still acquiring new sites. The shares yield just under 5% and should deliver income and long-term capital growth. 51.5p
Smart Metering Systems
The Sunday Times
The government wants 53 million smart meters in homes and businesses by the end of 2020. Smart Metering Systems is one of four companies in the UK that install and own such systems, and has contracts with eight energy suppliers to supply 2.5 million homes with meters. This market will only grow and some rivals have already been bought by yield-hungry infrastructure funds. 567.5p
Bellway
The Times
Shares in the housebuilder are now above where they were before the referendum amid signs that the housing market is doing just fine. Bellway is “widely diversified” across the UK and has been building up its land bank while increasing operating margins, which gives it “plenty of options for growth”. Those looking for growth should buy in. 2,837p
Three to sell
Essentra
Investors Chronicle
The plastic and fibre products supplier has issued three profit warnings in a year. Underlying profits fell by 35% last year, and things will only get worse as it faces new regulatory challenges in China and “dire news” emerges from its health and personal care arm. The market is banking on a swift recovery, but that could take much longer than expected. 527.5p
Saga
The Sunday Telegraph
So much for chasing the grey pound – shares in Saga have risen with “all the pace of a Stannah stairlift” since their stock-market debut in 2014. The over-50s are a growing market, but the fear is that Saga’s brand just doesn’t resonate with baby boomers. Recent ventures into wealth management and private-home healthcare have yielded notably underwhelming results. 212.25p
Debenhams
Shares
A new chief executive is trying to reinvigorate the department store, but Debenhams looks to be “struggling for relevance”. Like-for-like sales at UK stores have declined for four years amid “cut-throat” competition. The very long leases on its sites force it to continue investing in stores in “long-term structural decline” even as footfall ebbs and retail shifts online. 54.75p
And the rest
Investors Chronicle
Restaurant Group could turn a corner this year, and it offers a 5% dividend yield (359p). St Modwen Properties boasts a strong rental income and there is more value to come (317.75p). Capitalise on greater healthcare demand as the population ages with NHS software provider EMIS (861.5p).
Shares
Profits at concrete-levelling equipment specialist Somero Enterprise are on the rise and it could soon become a takeover target (285.5p). Take advantage of a dip in the share price at the fire and water safety firm Marlowe to snap up an excellent defensive stock (310p). Britain’s second-biggest brick maker Forterra looks undervalued now that its debt levels are under control (209p).
The Daily Telegraph
Hazard detection firm Halma has grown its dividend by at least 5% a year since 1980 and is a great option to “get rich slow” (1,011p). A recent acceleration in Revolution Bars Group’s branch opening programme shows that the shares still have further to go (204.25p).
The Times
Construction firm Kier Group is on track to meet growth targets after two good acquisitions (1,503p). Investors should steer clear of spread-betting specialist IG Group until regulatory uncertainty is resolved (523.5p). Sell B&Q owner Kingfisher – it faces an uncertain year as it tries to turn itself around (328p). The opportunity to take some profits from posh drinks maker Fevertree Drinks is too good to pass up (1,499p).
A French view
Visiativ is an IT firm that specialises in software that allows employees to collaborate more effectively. It recently completed its fourth acquisition since last summer, buying a majority stake in Numvision, a provider of cloud storage and data back-up technology. The deal is small, but Visiativ will be able to offer Numvision’s services to its existing 14,000 clients, says Investir. The deal adds another component to its plan for growing sales from €106m last year to €200m by 2020, through a mix of organic growth and acquisitions. The firm has the means to fund its ambitions: it completed a €7.5m capital raising last June and arranged a loan of €22m. Analysts expect net profits of €6m in 2017, up from €4.4m in 2016. The shares, which are up 50% this year, trade on a forecast price/earnings ratio of 16.
IPO watch
Eddie Stobart, the road haulage company famous for its red, green and white lorries, is hoping to raise £130m by listing on Aim. It will use the proceeds to pay off debt and “complete a bolt-on acquisition to complement its activities in the e-commerce sector”. The company, which is 51% owned by investment firm DBAY and 49% by infrastructure firm Stobart Group, will be renamed Eddie Stobart Logistics. Stobart Group will retain a “meaningful stake” in the business after listing. It generated revenue of £549m in the year to the end of November, with adjusted earnings before interest and tax of £41m. Eddie Stobart Logistics says it will “implement a progressive dividend policy” and will pay a dividend for the 2017 financial year.