Money Week - UK (2021-10-08)

moneyweek.com 8October 2021 MoneyWeek

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Thepastfortnighthasnotbeenkindtomyfour

longtips,withthreeofth emdep reciat ing.

HomebuilderDRHortonfellfrom$87.17to$ 83.20,

constructi onfirmMorganSi ndalldeclinedfrom

2,507pto2,335pandPlus500dropp edfro m1,416p

to1,41 0p.Theonlyexception wasmediagroup

ITV,whichremainedsteadyat1 08p.Br oker TP

ICAP,homebuilderPulteGroup,RoyalMailand

EnsignGr oupallstayedbelowthelev elatwh ichI

suggestedyoustartgoinglongont hem. Myfour

activetipsaremakingatotalprof itof£2,710,

downfr om£3,253.

Mys ixshorttipshavehadmixedfortunes.The

goodnew sist hatfouroft hemhavegonedown,

withonlytworising .Cloud -computingfirm

Snow flakefellfrom$310to$ 294,electric -car

compan yPlugPowerdeclinedfrom$25.72to

$24.32,cinemachainAMCslippedfro m$40.29to

$36.77 andremote-medicinespecialistTeladoc

declinedfrom$136to$122.Still,bitcoinrosefrom

$43,075to$50,302whileelectric-carmakerTesla

climbedfrom$730to$ 781.ThelossesfromTesla

andbitcoinmeanthatmys horttipsarelosing

£224,downfromaprof itof£1 09afortnightago.

Inowhavefivelongtips(ITV,DRHorton,

MorganSindall,Plus500andRathbone)andsix

shorts(Snowflake,PlugPower,AMC,Teladoc,

bitcoinandTesla).Ialsohavefourpendinglong

tips,whichhaveyettoreachthele velatw hichyou

shouldactivateth em(RoyalMail,TPICAP,Ensign

Groupand

Pult eGroup).Isuggest

youcancelTPICAP

complete ly,cutthe

levelatw hichyou

coveryourSnowflake

positionto$315(from

$325),andreducethe

pric eatw hichyou

coverTeslato$900

(from$990).

peopleincreasinglyinterestedin

theenvironmentalimpactoftheir

investments,thisisanothergrowth

area–andawayforwealthmanagers

tojustifytheirfees.

Rathbonehashadastrongtrack

recordoverthepastfiveyears.Sales

grewfrom£2 39 min 2015 to£3 97 m

in 2020 – whichreflectsanaverage

growthrateofjustunder 11 %ayear.

Thisisexpectedtocontinueoverthe

nextfewyears.Italsohasahealthy

operatingmarginofaround 15 %,

whichalloweddividendstorisefrom

55 pin 2015 to 70 plastyear.Despite

thisimpressiveperformance,thestock

tradesatarelativelymodestvaluation

ofaround 12 times 2022 earnings.It

alsooffersagenerousdividendyield

of 4 .2%.

WhileRathboneshareshaven’t

quitereturnedtotheirMarch 2020

level,theyareabovetheir 50 -day

and 20 0-daymovingaverages,

andonly5%downfromtheir

52-weekhighafew weeksago,

suggesting that marketsentimentis

positive.Itherefore su ggestgoing

long immediatelyatt he curr entprice

of 1,966p at £2 per1p. Putastop-

loss at 1,467p,givingyou apotential

downside of £998. ©i

Stockph

otos

Rathbone’ssalesgrewbyanannual11%between 2015 and 2020

Howmytipshavefared

Trading 33