Investment for January 2020

Discussion of the proposed Cashback Investment Club

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I would like to invest in

Poll ended at Mon Jan 20, 2020 12:01 am

Codemasters
9
75%
Barratt Developments
3
25%
Renew Holdings
0
No votes
Brewin Dolphin Holdings
0
No votes
None of the above
0
No votes
 
Total votes: 12

garindan
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Investment for January 2020

Post by garindan » Mon Jan 13, 2020 12:01 am

All,

Following the recent poll about our next investment I'm happy to provide new options for you to choose from. I'm going to leave the poll open until this time next week to allow everyone chance to think about the options and make a decision to support or otherwise.

Due to Sharecast not having three tips this past Sunday I have added two tips from the week before. I'll monitor the poll and if it becomes clear four is too many I'll consider removing an option. If you are not happy with me doing that at my discretion please let me know.

So you have four options to support or decide against all - over to you!

Codemasters
Barratt Developments
Renew Holdings
Brewin Dolphin Holdings
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garindan
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Re: Investment for January 2020

Post by garindan » Mon Jan 13, 2020 12:03 am

Codemasters
Over at This is Money, Joanne Hart singled out video games developer Codemasters as one of three key stocks to watch in 2020.

Hart, in her Midas Share Tips column, noted that over the past 40 years, video gaming had become a £90bn industry, with sales rising by around 9% annually.

"Codemasters is a relative minnow in the sector but it is growing faster than the rest of the market and chief executive Frank Sagnier believes that the group can double in size over the next five years," said Hart.

She noted that the shares have had a good run in recent months but, at £2.78, Hart noted that they were "still undervalued compared to rivals" and should continue to gain ground this year and beyond.

Around 60% of Codemasters' revenues come from digital games and this is expected to rise to close to 90% over the next few years.

"Sagnier has also signed a deal with one of China's biggest gaming groups, NetEase, which should prove hugely rewarding. And Grid is one of the first games on a new streaming service from Google, Stadia, a little like Netflix for gamers," Hart added.

Midas declared the "fast-growing business in a resilient industry" a 'buy'.
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Re: Investment for January 2020

Post by garindan » Mon Jan 13, 2020 12:04 am

Barratt Developments
The Telegraph's Robert Stephens said on Sunday that Boris Johnson's election victory had given housebuilder Barratt Developments "reason to cheer" by virtue of eliminating the risk of Labour's "Land for the Many" housing market ideas being implemented.

In his Questor share tips column, Stephens said a Conservative majority meant that Barratt could instead look forward to the continuation of long-standing government policies that had pushed first-time buyers toward its newbuild properties.

"Now, policies such as Help to Buy and stamp duty relief are likely to remain in place, or even be extended, as Mr Johnson's government seeks to make housing more affordable for first-time buyers," said Stephens.

Stephens noted that housing affordability should be further supported by continued low interest rates and added that ongoing Brexit uncertainty and a modest rate of inflation could make the Bank of England increasingly reluctant to tighten monetary policy.

"Low interest rates have undoubtedly aided housebuilders such as Barratt in recent years. For example, loose monetary policy since the financial crisis has contributed to a fall in the proportion of disposable income that homeowners spend on their mortgage repayments," he said.

Questor, which stood by its 'buy' rating on the firm, thinks demand for newbuild homes should continue to be robust, which should vindicate Barratt's plan to increase the number of homes that it builds.

Stephens highlighted that investors' fears over political uncertainty had also contributed to "a depressed price-to-earnings ratio", currently 10.3, but he reckons that the share price should start to recover as the threat of a socialist government, with its "radical plans for the housing industry", has now dissipated.

"Barratt's stock market valuation may now begin to more accurately reflect the attractive operating conditions it enjoys and the business could deliver improving long-term returns for investors," he concluded.
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Re: Investment for January 2020

Post by garindan » Mon Jan 13, 2020 12:05 am

Renew Holdings
Over at This is Money, Joanne Hart said Renew Holdings had "come a long way" since recommending the stock at 75p in 2012.

Once known as a construction firm, Hart said Renew had steadily increased its focus on essential renewal and maintenance work in areas such as railways, waterworks, mobile antennae and nuclear decommissioning.

Today, Hart pointed out in her Midas Share tips column that these businesses now generated 95% of group income - sales and profits also soared and shares surged to £5.00 each.

Looking ahead, Hart believes Renew should continue to deliver growth.

"The Government has pledged to spend billions of pounds on infrastructure, a good proportion of which will be invested in upgrade and modernisation projects. Renew is ideally placed to benefit from these plans," she said.

"Renew shares have risen sharply in the past two months. Investors applauded last year's results and Scott is optimistic about the future. Shareholders have earned a good return from this stock, but there is more to come. Keep holding."
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Re: Investment for January 2020

Post by garindan » Mon Jan 13, 2020 12:06 am

Brewin Dolphin
The Sunday Times' Emma Dunkley stated wealth managers have had a "tough time of late", with the screw being turned on fees, tightened by the rise of tracker funds.

In her Inside the City column, Dunkley pointed out that last week, US giant Vanguard, a "prolific provider of low-cost funds", received the green light to provide financial advice in the UK - yet another blow to British asset managers.

However, Dunkley said it was not all doom and gloom for the sector.

"Although investors kept some of their powder dry last year, because of political uncertainty, Brewin Dolphin still saw net inflows of £1.4bn into its discretionary funds run by managers," she said.

Analysts at Liberum also highlighted that Brewin Dolphin's inflows were "well ahead of peers".

"The FTSE 250 upmarket wealth manager, with a market value of £1.1bn, is on the front foot when the industry is consolidating to boost scale," she said while issuing the group with a 'buy' rating.
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Re: Investment for January 2020

Post by AAAlphaThunder » Mon Jan 13, 2020 10:01 am

Just my opinion, not fact:

Codemasters: Significant potential;

Barratt Developments: Missed the boat;

Renew Holdings: Over-priced;

Brewin Dolphin Holdings: Emma misses two key trends - the rise of robo-investments and the heyday of sites the eToro. Rough seas ahead.
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Re: Investment for January 2020

Post by pieman » Mon Jan 13, 2020 10:48 am

I mostly concur with triple A
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Re: Investment for January 2020

Post by garindan » Thu Jan 16, 2020 12:50 pm

Codemasters jumped another 5% this morning...
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Re: Investment for January 2020

Post by richard@imutual » Thu Jan 16, 2020 4:20 pm

At current prices, Codemasters has a P.E ratio of 93, versus 10 for Barratts. Admittedly, the former has more potential growth but there's a lot of hope built into that valuation
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Re: Investment for January 2020

Post by garindan » Thu Jan 16, 2020 4:41 pm

richard@imutual wrote:
Thu Jan 16, 2020 4:20 pm
At current prices, Codemasters has a P.E ratio of 93, versus 10 for Barratts. Admittedly, the former has more potential growth but there's a lot of hope built into that valuation
I can't say I disagree with you as I don't. However, in the spirit of backing things a little more racy Codemasters would be far more interesting an investment than any of the other three. That's what took my vote in the end but I did have to think about it quite a lot. High P.E. is not always bad of course, so hopefully, if we do buy this one on Monday next week, we'll see happen what we'd like to see...
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