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Five shares the pros are buying and selling

Our regular roundup of trades by professional investors, featuring Citywire AA-rated Nick Train's latest buy.

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Click on the arrow to the right of the picture to see the slides. 

To sell all the slides on the same page, click here.

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Key stats
Dividend yield 2.2%
Market capitalisation £305m
No. of shares out 418m
No. of shares floating 291m
No. of employees 200
Trading volume (10 day avg.) 1.9m
Turnover £153m
Profit before tax £46m
Earnings per share 6.31p
Cashflow per share 7.41p
Cash per share 2.84p

Go Compare (GOCO)

Who’s trading? Citywire A-rated Mark Niznik

The trade: Artemis’ UK small cap veteran trimmed his stake in price comparison website Go Compare from just over 5% of shares to 4.9% worth £15.1 million.

How have the shares performed? Go Compare is effectively flat since late 2018, but bounced sharply at the beginning of the month on news chair Sir Peter Wood was a major buyer.

What does the company say? In a statement after spending £11 million to up his holding from 25% to just below 30% Wood said the recent price ‘does not fully reflect the operational and strategic momentum in the business’. Operating profit last year climbed 14.2%, to £37.7 million, on a 2.3% rise in revenue.

What’s the outlook? Lower car insurance premiums reduced switching last year, cutting the revenue generated from one of Go Compare’s biggest sectors. The company’s cost strategy appears to be paying off however, as it clamped down on customer acquisition expenses. City brokers tracked by Reuters hold the share on a median 102p price target.

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Key stats
Dividend yield 0%
Market capitalisation £1,219m
No. of shares out 750m
No. of shares floating 39m
No. of employees 522
Trading volume (10 day avg.) 0m
Turnover £102m
Profit before tax £16m
Earnings per share 11.72p
Cashflow per share 19.18p
Cash per share 45.40p

Celtic (CCP)

Who’s trading? Citywire AA-rated Nick Train

The trade: Train, arguably the UK’s leading growth manager, upped his stake in Scottish Premiership champion Celtic from 17.1% of the shares to 18.4%.

How have the shares performed? Club equity has rocketed 128% since early 2017, although it has slipped from a recent high of 166p following coach Brendan Rodgers’ departure.

What does the company say? Rodgers’ exit has dented perceptions of Celtic’s dominance of Scottish football in his three seasons in charge. The failure to qualify for the Champions League last year knocked revenue from £71.5 million to £50 million in the second half.

What’s the outlook? House broker Canaccord Genuity is the only analyst to rate the stock, on a ‘buy’ and a 185p target. Writing last year Train, who also owns a stake in Juventus, said: 'Sports and entertainment assets remain in a bull market. That which attracts eyeballs to screens is going up in value.’

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Key stats
Dividend yield 0.1%
Market capitalisation £621m
No. of shares out 82m
No. of shares floating 78m
No. of employees 1,004
Trading volume (10 day avg.) 0.4m
Turnover £125m
Profit before tax £18m
Earnings per share 4.73p
Cashflow per share 17.61p
Cash per share 7.85p

Future (FUTR)

Who’s trading? Citywire AA-rated Harry Nimmo

The trade: Standard Life’s small cap veteran lifted his stake in specialist magazine publishing house Future from 3% of shares to 5.2%.

How have the shares performed? Steadily increasing interest in the last two years has gone parabolic since February. Over 12 months the shares are up by more than 250%.

What does the company say? The tech, hobbyist and computer gaming publisher stoked the rally with news that it expects first half 2019 profit to be ‘significantly’ ahead of previous forecasts. That was further juiced with the news that the company would graduate to the main exchange, automatically attracting FTSE tracker money.

What’s the outlook? Both of the City analysts who track the stock rate it a ‘strong’ buy but the extraordinary uplift since January has left the company bumping up against price targets issued by Peel Hunt, on 750p, and Numis, on 860p, and on a rich valuation of 22 times forecast earnings.

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Key stats
Dividend yield 3.9%
Market capitalisation £125m
No. of shares out 207m
No. of shares floating 105m
No. of employees 93
Trading volume (10 day avg.) 0.3m
Turnover £147m
Profit before tax £23m
Earnings per share 7.30p
Cashflow per share 7.44p
Cash per share 19.91p

Inland Homes (INLD)

Who’s trading? Citywire A-rated Guy Barnard

The trade: Janus Henderson’s property veteran cut his stake in real estate developer and speculator Inland Homes from 5% of the shares to below a disclosable level.

How have the shares performed? The price of the business has not made any headway since mid-2016 but having dropped to a four-year low of 47p in late 2018 has since rallied 30%.

What does the company say? The former brownfield trading group cheered investors in January as it reported that a planned conversion into a full-fledged housebuilder was progressing with a new £65 million overdraft from HSBC. While revenue slumped 16% last year on lower completions profit rose from £5.4 million to £5.5 million on higher margins.    

What’s the outlook? Both analysts in its coverage rate the stock a buy on a 114p price target. The business sits on top of a land bank valued at £2.2 billion in development potential and remains at a discount to its peer group, at 7.3 times forecast earnings, versus an average nine times.

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Key stats
Dividend yield 3.4%
Market capitalisation £32m
No. of shares out 17m
No. of shares floating 13m
No. of employees 593
Trading volume (10 day avg.) 0.2m
Turnover £74m
Profit before tax £7m
Earnings per share 20.29p
Cashflow per share 31.51p
Cash per share 5.45p

Swallowfield (SWL)

Who’s trading? Citywire AA-rated Giles Hargreave & AAA-rated Guy Feld

The trade: The Marlborough UK Micro-Cap Growth managers upped their stake in cosmetics manufacturer Swallowfield from 4.7% of shares to 6.2%.

How have the shares performed? Swallowfields has lost 57% of its value since reaching a record high of 417p in mid-2017, tumbling 19% since mid-February alone, to recently hit a three-year low of 180p.

What does the company say? Investors have fled Swallowfield following news that profit tumbled over the six months to end January, from £2.8 million to £278,000, on a ‘high level of material cost inflation’, big enough to more than wipe out a 6.9% increase in revenue to £34.2 million.

What’s the outlook? Largely ignored by City brokers, Swallowfield’s sole analyst Canaccord Genuity has maintained the company on a ‘buy’ recommendation last week, despite slashing its price guidance from 420p to 305p. The company trades at a big discount to its sector, at just 6.9 times forecast earnings versus an average 19.4 times.

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