The Week - UK (2022-05-28)

Shares CITY 47

28 May 2022 THE WEEK

Aviva
The Times
The insurer has cut costs and
slimmed down. The March
acquisition of wealth manager
Succession is set to attract
new business from existing
customers. The generous
potential 8.9% divi yield looks
more secure. Buy. 405.65p.

BHP Group
The Daily Telegraph
Commodities tend to
outperform in high inflation
eras. This diversified miner
aligns its portfolio with growth
sectors: including potash (a
fertiliser component), and
copper and iron ore (key in the
shift to net-zero). Buy. £25.99.

British Land

The Mail on Sunday

The London-focused REIT

has proved nimble and

adaptable, moving into urban

logistics and developing

“campuses” that include

homes, offices, shops,

restaurants and outdoor space.

Profits are up 25%. Buy. 519p.

Moneysupermarket

The Sunday Times

Insurance revenues are flat,

and record energy costs have

deprived the price comparison

site of cheap tariff switches.

But the travel arm has

recovered, and the cost-of-

living crisis should drive

punters to the site. Buy. 172.8p.

Taylor Wimpey

The Daily Telegraph

Rising interest rates and

household costs are expected

to slow the housing market.

But this builder has the

financial means to buy land

cheaply, grow its pipeline

and improve its competitive

position. Buy. 127.25p.

Vodafone Group

Investors’ Chronicle

Voda is “more international”

than rival BT, with a high-

margin German arm and a

strong African growth market,

which includes a mobile

money platform. Capex is

high – one for the long term.

Yields 6.4%. Buy. 120p.

Who’s tipping what

The week’s best shares

...and some to hold, avoid or sell

Benchmark
Investors’ Chronicle
This aquaculture and biotech
firm’s revenues are up in all
divisions – genetics, animal
health and advanced nutrition.
Still, borrowing facilities are
due to expire in 13 months,
and inflationary pressures are
worrying. Hold. 45p.

Burberry Group
Investors’ Chronicle
The luxury fashion and
accessories brand has cut costs
and grown profits, thanks to
ballooning sales in the
Americas – up 47%. But
it remains dependent on
China, where lockdowns are
impacting sales. Hold. £15.89.

Hollywood Bowl Group

The Sunday Telegraph

The bowling operator is a

“good business”. But margins

could be squeezed, amid rising

costs and the waning novelty

of post-lockdown activities as

cash-strapped punters cut back.

Take profits. Sell. 234p.

Imperial Brands

Investors’ Chronicle

The tobacco giant is making

progress: debt is falling, and

next-generation products

have outperformed

traditional tobacco. But

these still equate to just 3%

of revenues, and societal and

regulatory challenges are

escalating. Sell. £17.89.

Marston’s

Investors’ Chronicle

The pub and hotel operator

has shot back to profitability

after Omicron hit the vital

Christmas trading period. Sales

are at 97% of pre-pandemic

levels and debt is reducing,

but rising costs will impact

earnings. Hold. 60p.

Royal Mail

The Times

Royal Mail’s global arm,

GLS, has been buoyed by a

recovery in B2B deliveries. But

competition is tough, and high

operational gearing makes it

vulnerable to falling parcel and

letter volumes. Set for a profit

warning. Avoid. 342.4p.

Directors’ dealings

Ocado Group

The grocery disrupter is

enduring “punishing” times.

Chair Rick Haythornthwaite

and Ocado Technology CEO

James Matthews increased

their stakes – spending

£100,000 and £88,000

respectively on shares.

Form guide

Shares tipped 12 weeks ago

Best tip

BAE Systems

The Mail on Sunday

up 18.71% to 775.2p

Worst tip

Made.com Group

The Sunday Times

down 25.15% to 50.9p

Market view

“Now is one of those 2008

moments where everyone [in

trend-following] is doing well

again. The trends are clearer.”

Leda Braga of Systematica

Investments on the

resurgence of computer-

driven “quant” hedge funds.

Quoted in the FT

SOURCE: INVESTORS’ CHRONICLE

Market summary

6-month movement in the FTSE 100 index

24 May 2022 Week before Change (%)

FTSE 100 7484.35 7518.35 –0.45%

FTSE All-share UK 4126.79 4149.88 –0.56%

Dow Jones 31617.06 32460.65 –2.60%

NASDAQ 11214.46 11886.27 –5.65%

Nikkei 225 26748.14 26659.33 0.33%

Hang Seng 20112.10 20602.52 –2.38%

Gold 1856.20 1809.50 2.58%

Brent Crude Oil 113.49 113.84 –0.31%

DIVIDEND YIELD (FTSE 100) 3.71% 3.69%

UK 10-year gilts yield 1.88 1.86

US 10-year Treasuries 2.74 2.97

UK ECONOMIC DATA

Latest CPI (yoy) 9.0% (Apr) 7.0% (Mar)

9.0% (Mar)

11.0% (Mar)

Latest RPI (yoy) 11.1% (Apr)

Halifax house price (yoy) 10.8% (Apr)

£1 STERLING: $1.255 s1.174 ¥159.602 Bitcoin $29,714

Key numbers for investorsKey numbers for investors Best and worst performing sharesBest and worst performing shares Following the Footsie

WEEK’S CHANGE, FTSE 100 STOCKS

RISES Price % change

Vodafone Group 128.84 +7.10

Airtel Africa 152.60 +6.49

Aviva 428.70 +5.68

Fresnillo 818.80 +5.19

Dechra Pharmaceuticals 3474.00 +4.70

FALLS

WPP 875.60 –12.18

Scottish Mortgage 693.20 –11.40

JD Sports Fashion 119.30 –9.52

3i Group 1222.00 –9.35

Royal Mail 313.70 –8.76

FTSE 250 RISER & FALLER

Homeserve 1162.00 +11.90

Tui Ag 183.45 –25.40

Source: Datastream/FT (not adjusted for dividends). Prices on 24 May

7,000

7,500

7,700

7,400

7,600

7,300

7,200

7,100

Dec Jan Feb Mar Apr May

1,000

1,250

1,750

1,500

Dec Jan Feb Mar Apr May

2 directors

buy 23,663