Stocks with Momentum Behind Them and a Sunny Outlook Ahead
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STOCKS | FUNDS | INVESTMENT TRUSTS | PENSIONS AND SAVINGS VOL 19 / ISSUE 32 / 17 AUGUST 2017 / £4.49 SHARES WE MAKE INVESTING EASIER Summer Sizzlers STOCKS WITH MOMENTUM BEHIND THEM AND A SUNNY OUTLOOK AHEAD SELL OFF REBOUND WHAT NEXT FUNDS HUNTING AFTER MARKET RECOVERY VOLATILITY? POTENTIAL DREAM INVESTMENT? WE TEST OUT MATTRESS BRAND EVE SLEEP The opportunity of a Lifetime (ISA) Aged 18-39? Save £4,000 each year, and the government will give you £1,000 – for free – to spend on your first home, or retirement. Open an account today Up to £32,000 youinvest.co.uk in free government Low-cost SIPPs, ISAs, funds & shares bonuses Capital at risk. We don’t offer advice so if you’re unsure please consult a financial adviser. Tax rules may change. Paying into a Lifetime ISA may affect employer pension contributions and your future entitlement to means tested benefits. 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All companies are registered in England and Wales at 4 Exchange Quay, Salford Quays, Manchester M5 3EE EDITOR’S VIEW Shell goes electric Will strategy shift from oil major lead to boos or applause n last week’s Editor’s View we A growing middle class in India and mentioned Trump as a possible China buying their own cars has long been Icatalyst for a summer sell off and seen as a driver of oil prices but growing so it is proving. momentum behind a shift to electric And having reached two month vehicles could challenge this orthodoxy. highs in late July crude oil prices have endured another round of volatility ELECTRIFYING THE DEBATE partly inspired by the spat between In July Volvo pledged that all cars will be North Korea and the US. electric or hybrid by 2019 and regulation Oil often appears to be a vehicle in the EU and other major geographies is for the market to express its view on pushing other car manufacturers in the economic and political backdrop. this direction. Understandably given the role it plays in fuelling How will the oil and gas majors, companies like the world economy. BP (BP.) and Royal Dutch Shell (RDSB) in the UK, respond if a key source of demand for WHAT ARE THE LONG-TERM PROSPECTS oil disappears? FOR OIL? This matters to most investors given the For now markets have calmed down, although contribution these two companies make to the total the resulting rebound in the dollar and signs of dividend from the FTSE 100. According to the latest slowing demand in China have not proved helpful Dividend Monitor report from Capita Asset Services, to crude in the interim. As we write the global oil, gas and energy stocks accounted for more than benchmark for oil, Brent, is holding just above $50 12% of the available dividend income from the index per barrel while its US counterpart West Texas in the second quarter. Intermediate trades at around $47. Shell appears to be increasingly preparing itself for This author has generally held to the view that an electric future. Chief executive Ben van Beurden a combination of two factors will provide support says his next car will be electric and the Anglo- to oil prices in the long-term. First the world Dutch firm has announced from early next year it still needs oil and lots of it. It remains the main will sell electricity to industrial customers in the UK, way we power transportation and is used in the including to its own 600 domestic sites. There is talk production of plastics and insulation products and of rolling this plan out to North America too. for heating. It may be too early to predict the death of fossil Second it is a finite resource and while fuels but if Shell is planning for a low carbon future it technology may eventually unlock reserves which is something to think about at least and a reminder are beyond the reach of the world’s oil producers to keep an open mind about future economic and today, we will run out eventually. market developments. (TS) 17 August 2017 | SHARES | 3 Contents INTERACTIVE PAGES CLICK ON PAGE NUMBERS TO JUMP 17 August 2017 TO THE RELEVANT STORY EDITOR’S VIEW GREAT IDEAS 03 Shell goes electric 13 Greggs expansion still has legs 22 BIG NEWS 06 Big trouble for big GREAT IDEAS ticket retailers 14 Non-Standard Finance’s sub-prime BIG NEWS growth story 07 Telit trauma continues amid GREAT IDEAS UPDATES CEO drama 16 Tesco turnaround on track BIG NEWS 08 Mears reassures GREAT IDEAS UPDATES after Grenfell-related 18 Ryanair has delays further to fly BIG NEWS TALKING POINT 09 Dividend potential 19 Where next for flagged at Clarkson market after sell off? STORY IN NUMBERS WEEK AHEAD 10 IQE’s heady ascent 20 Results, trading and other stories updates, AGMs in numbers and more over the coming week LARGER COMPANIES 6 22 Could a Pru UK exit be on the cards? securities, derivatives or positions with spread betting organisations that they have an interest in should first clear their writing with the editor. 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In keeping with the existing practice, reporters who intend to write about any on-sale date of the magazine. 4 | SHARES | 17 August 2017 Contents 25 SMALLER COMPANIES MONEY MATTERS 23 Spinnaker spies 34 Time to review energy opportunities 36 pension drawdown arrangements SMALLER COMPANIES 24 Harvest the recovery MONEY MATTERS at Carr’s 36 Official stats expose great pensions divide MAIN FEATURE 25 Summer Sizzlers FUNDS 38 Bold recovery UNDER THE BONNET calls can bring big 30 Eve Sleep could be rewards AIM’s next dream investment INDEX 40 Index of companies, INVESTMENT TRUSTS funds, investment 32 Why investment trusts and ETFs in this trusts use gearing week’s magazine WHO WE ARE BROKER RATINGS EXPLAINED: EDITOR: DEPUTY NEWS Daniel EDITOR: EDITOR: We use traffic light symbols in the magazine to illustrate Coatsworth Tom Sieber Steven Frazer broker views on stocks. @SharesMagDan @SharesMagTom @SharesMagSteve FUNDS AND REPORTER: JUNIOR REPORTER: CONTRIBUTORS Green means buy, Orange means hold, Red means sell. INVESTMENT TRUSTS David Stevenson Lisa-Marie Janes Emily Perryman EDITOR: @SharesMagDavid @SharesMagLisaMJ Tom Selby James Crux Holly Black The numbers refer to how many different brokers have @SharesMagJames that rating. MANAGING DIRECTOR PRODUCTION ADVERTISING 4 2 1 Mike Boydell Head of Design Senior Sales Executive Eg: means four brokers have buy ratings, Rebecca Bodi Nick Frankland two brokers have hold ratings and one broker has a sell 020 7378 4592 rating. CONTACT US: Designer [email protected] [email protected] Darren Rapley The traffic light system gives an illustration of market views Shares magazine is published weekly every Thursday (50 times per year) by AJ Bell Media Limited, 49 Southwark Bridge Road, London, SE1 9HH. Company Registration No: 3733852. but isn’t always a fully comprehensive list of ratings as some All Shares material is copyright. Repro duction in whole or part is not permitted without written banks/stockbrokers don’t publicly release this information. permission from the editor. 17 August 2017 | SHARES | 5 BIG NEWS Big trouble for big ticket retailers Near-term outlook for non-food retailers is negative alling real wages, faltering consumer With consumers deferring spend on big ticket confidence and imported inflation are now items, ScS’ like-for-like order intake for the year to F having a big impact on appetite for big 29 July eased off 0.7%, although CEO David Knight purchases.