We round up the Sunday newspaper share tips. This week, Midas tips the new Ashoka India Equity Investment Trust, the Sunday Times looks at Speedy Hire, and the Telegraph assesses Merlin Entertainments.
The Ashoka India Equity Investment Trust is a new company expected to list on the stock market early next month at 100p a share.
Ashoka India is the brainchild of Prashant Khemka, a highly experienced fund manager with a track record of success.
Born and raised in Mumbai, Khemka spent ten years running a multi-billion-dollar Indian fund for top US investment bank Goldman Sachs. During his tenure the fund delivered a return of 118 per cent, outperforming its peers by a significant margin.
Now Khemka intends to do the same – or better – with Ashoka.
Khemka has assembled a team of seven specialists with more than 80 years of experience between them. Their task is to scour the Indian stock market for undervalued, mid-sized companies with significant growth potential.
India is in the throes of an economic transformation. In 2010, it was the ninth largest economy in the world. This year, it will be the fifth and it is likely to move to third place in the next few years, overtaking Japan in the process.
This year alone, the Indian economy is expected to grow by 7.5 per cent, outstripping the UK, as well as the US and even China.
Encouragingly, too, the Ashoka team do not receive an annual fee simply for managing the fund. They are only paid if they deliver sustained outperformance over several years.
Midas verdict: The Ashoka India Equity Investment Trust hopes to raise between £100 million and £200 million, listing in the first half of July at 100p a share. The shares will be offered via intermediaries, the money will be invested within the first few weeks and the shares should prove rewarding.
Khemka and his team are knowledgeable, experienced and have been highly successful to date. With India going from strength to strength, Ashoka offers a good opportunity for British investors to access the Indian market.
THE SUNDAY TELEGRAPH
At the end of a rocky five years, the shares are at their highest point since last October’s profit warning, when the company said terror attacks in London were putting visitors off London, and poor weather had dampened trade elsewhere.
‘This summer looks better already. After Britain’s hottest May on record, forecasters predict the good weather to continue over the next three months. Domestic trade is important but Merlin has rapidly internationalised to operate more than 120 attractions, 18 hotels and six holiday villages in 25 countries,’ he writes.
‘What makes the stock attractive is the step-up in profitability that is due in 2019. Merlin shares trade on 16 times next year’s forecast earnings. Thrillseekers could easily find somewhere riskier to stash their cash but for everyone else Merlin is worth buying.’ Questor tips the stock as a buy.
THE SUNDAY TIMES
‘Three years is a long time in the world of tool hire,’ says John Collingridge in The Sunday Times’ Inside the City.
‘Rewind to 2015 and Speedy Hire, the Liverpool-based supplier of power drills and cherry pickers, was on the ropes.
‘The discovery of accounting irregularities in its Middle East operations in late 2013 had triggered a downward spiral. Two chief executives were forced out and its biggest shareholder, Toscafund, tried to engineer a merger with its rival HSS.’
Inside the City explains how Russell Down was promoted from finance director to run the company, and improved efficiency.
‘That approach has paid dividends. Asset utilisation is up to 55.4% from 44% when Down took over
‘There are concerns. Speedy is exposed to swings in the construction industry and households’ appetite to build extensions, but its growth in infrastructure, supplying projects such as the Thames Tideway Tunnel, gives it a nice cushion if the domestic and commercial market struggles.’ Inside the City tips the stock as a buy.
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