MoneyWeek’s comprehensive guide to this week’s share tips from the UK’s financial press.
Three to buy
Air Partner
The Mail on Sunday
Air Partner charters jets for sports teams such as Manchester City, Real Madrid and Juventus. It also arranges transport for oil workers, evacuates expatriates from overseas and transports businesspeople who want to avoid busy airports. It has been operating in this market for 50 years. New acquisitions show it is serious about safety as airports become more crowded and concerns about terrorism grow. 377.5p
Dixons Carphone
Shares
Investors should take advantage of post-Brexit share-price weakness at the electrical and telecommunications giant. The group is internationally diversified, including a major joint venture in the US with Sprint. Improving cash flow means it has the financial firepower to compete with the threat from Amazon. A first-quarter trading update, due next month, could spark upgrades by brokers, so buy now. 365.25p
Polypipe
Financial Times
Shares in the manufacturer of plastic piping systems have gone back up to pre-referendum levels on the back of strong sales figures for the first half of the year. It is generating more sales from repair and maintenance than new-builds, which should insulate it from any post-Brexit downturn. With the shares trading on less than 13 times 2016 earnings, they are “not bad value for a growing business”. 281p
Three to sell
Bovis Homes
The Times
Management at the housebuilder is showing signs of caution in the wake of the referendum result. Bovis is focused on housing in the southeast, where skill shortages and rising costs have depressed returns in the past. It’s “too soon to forecast the future direction of the market”, but other stocks in the sector offer higher yields and a safer bet. Avoid. 813p
Evraz
Investors Chronicle
Evraz, one of Russia’s largest steel producers, has reported a 38% fall in half-year cash profits. The global outlook for steel remains unfavourable as China refuses to reduce excess production capacity. There was a modest rally in steel prices in the second quarter and Evraz’s unit costs continue to fall, but any benefit will be outweighed by its substantial debt. 166p
HSS Hire
The Sunday Times
Britain’s second-biggest tool-hire business went public last year, and the flotation has been a “total disaster”. After two profit warnings and the resignation of boss Chris Davies, the shares are now at a third of the level at which they originally floated. HSS blames erratic market conditions, but the company should probably never have gone public. 79p
And the rest
| Buys | |
| Admiral | The group is among the best in the insurance sector and the yield is attractive (Times) 2,081p |
| Amino Technologies | The tech firm has struck a “landmark” deal with PCCW that will boost its profile (Shares) 147p |
| CLS Holdings | CLS is not exposed to the risky central London property market and looks cheap (Times) 1,350p |
| Dunelm | The retailer is a quality defensive stock with a good dividend outlook (Investors Chronicle) 890p |
| Genus | New bovine gender selection technology could improve margins (Shares) 1,827p |
| Gooch & Housego | The photonics specialist has big prospects and is worth its premium rating (IC) 1,025p |
| Inland Homes | The value of this housebuilder’s land bank isn’t reflected in its share price (IC) 63p |
| K3 Business Tech | The software and IT services firm is growing quickly and its shares are cheap (IC) 313p |
| Lookers | Lookers has the cash for an acquisition spree in the car dealership sector (Times) 129.25p |
| Marshall Motor | The automotive group has posted record interim results in a consolidating market (Shares) 160p |
| Mears Group | The firm’s social-care division can only expand as demand grows (Times) 416p |
| Proactis | Shares in the automated buying platform could rise 50% within 18 months (Shares) 130.5p |
| Prudential | Stick with this insurer as it taps into Asian markets for growth (Shares) 1,421p |
| Stock Spirits | There are encouraging signs of a turnaround at this vodka maker (Shares) 163p |
Directors’ dealings
Three non-executive directors of camera-equipment group Vitec have spent a combined £108,000 on shares in the company. Mark Rollins and Christopher Humphrey have doubled their stakes to 10,000 shares each (2.2% of the outstanding shares), while Caroline Thomson made her first purchase of 8,407 shares (1.9%). Recent results have been mixed – profits fell last year due to exchange-rate effects and restructuring costs – but are on track to improve this year. The stock trades on 11 times forecast earnings and a 4% dividend yield.
A German view
Industrial and household-goods giant Henkel has been growing earnings steadily for years, propelling its share price up fivefold since 2009. The group, whose products range from laundry detergent and bottle labels to hair dye and adhesives, is on track to turn over more than €20bn for the first time next year, says Wirtschaftswoche.
Organic sales growth is solid, while it has just acquired US laundry detergent maker Sun Products, allowing it to compete more effectively with rival Procter & Gamble in the world’s biggest laundry detergent market. The takeover also means that consumer-orientated businesses will now comprise more than 50% of revenues, making the stock less cyclical – and thus even more popular among investors seeking dependable blue-chips.