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Weekly Shares Tips

In association with Shares Magazine.

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18 May 2017

To help you maximise investment opportunities, we have teamed up with Shares Magazine to provide you with timely insight into current market trends.

Below you will find their top tips and the week's Best and Worst Performers.

Important information

This webpage contains information supplied by Shares Magazine that is intended for general information only and therefore specific needs, investment objectives, risk appetite or financial situation of any person have not been taken into consideration. It does not constitute advice or an invitation to invest.

Please remember the value of your investments and any income from them can go down as well as up and you may get back less than the amount you originally invested.

Past performance is not a guide to future performance.


Gain to date: 21%

Steven Frazer

A negative reaction to the latest results from drilling on SDX Energy’s (SDX:AIM) South Disouq concession in Egypt’s Nile Delta is eating into the gains on our trade but we remain bullish.

Chief executive Paul Welch told an audience at a Shares investor evening in Edinburgh on 15 May that testing of the gas discovery at South Disouq will now be completed before Ramadan begins on 26 May, having previously anticipated the work would have to wait until after the conclusion of the religious festival.

The outcome from this testing could act as a catalyst for the shares after they fell on news (5 May) that the SD-1X well, while uncovering a shallower gas find, did not uncover oil in commercial quantities in deeper intervals.

Welch says the existence of a working petroleum system in these same intervals means oil could be produced from elsewhere in the concession. A working petroleum system means all the geological elements required to produce hydrocarbons are present.

The company plans further drilling to prove up the oil potential in the field and has already scheduled a seven-well programme in Morocco in the remainder of 2017.

Shares says:
"FinnCap believes the shares could go as high as 12p, implying more than 170% upside from the current level. We remain positive on the investment case."
Buy Seeing Machines

SDX Energy (SDX:AIM) 60p

Gain to date: 56.9%

Tom Sieber

Environmentally focused Impax Asset Management’s (IPX:AIM) first half results to 31 March show £830m of inflows into its funds.

Chief executive Ian Simm says the environmental markets in which the firm invests should benefit from the US’s shale and oil industry as there is greater need for clean water, recycling and waste management.

Not only has the firm enjoyed a 27% growth in assets in six months, it has also doubled its profit in the same period.

House broker Peel Hunt says Impax is enjoying strong momentum as investor demand is robust for the group’s products. Impax’s total assets under management now stand at £6bn, slightly exceeding the broker’s earlier forecast of £5.9bn by September 2017.

Peel Hunt has upgraded its forecasts for the third time this year, now expecting earnings per share of 4.8p. This puts the firm’s price to earnings ratio at a heady 21-times, suggesting the market has confidence that Impax can deliver.

Shares says:
"Recent weakness is an opportunity to top up"
buy SDX Energy

First Property is greedy when others are fearful

Impressive demand for its funds trigger higher earnings expectations.

David Stevenson

Commercial real estate investor First Property (FPO:AIM) is becoming more serious about the UK for the first time in 10 years.

The company exited most of its UK property in 2007 as its chief executive Ben Habib says the market had ‘topped out’. The company subsequently moved into Polish properties, Habib noting they had lower valuations with higher yields.

Habib is now interested in UK property because ‘of the nervousness of the institutions, they’re not buying [since Brexit]’. The company recently invested in two UK properties costing in excess of £23m.

For First Property, the business model is all about the yield gap, which is the yield on the property compared to the cost of borrowing against it. This had disappeared in 2007 hence the company’s retreat from the UK but due to low interest rates and attractive valuations has now returned.

The firm trades on a price-to-earnings ratio of nine times and yields 3%. First Property has its assets split equally between the UK and Poland at the moment, but Poland brings in 85% of the revenue. Habib says this gap will narrow once the UK funds are fully invested.

Shares says:
"Peel Hunt says the half year results are a clear indication that Impax is going through a step change in scale, with profit and assets moving materially higher. We share the bullish view."
Buy Impax

Best and worst performers

Week change to: 17/05/2017

Source: SharePad

FTSE 350 best performers
% change
KAZ Minerals
Hochschild Mining
Acacia Mining
Metro Bank
Polymetal International
Nostrum Oil & Gas

FTSE 350 worst performers
% change
Hargreaves Lansdown
Ted Baker
Pets at Home
Hikma Pharmaceuticals

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Alliance Trust Savings Limited is a subsidiary of Alliance Trust PLC and is registered in Scotland No. SC 98767, registered office, PO Box 164, 8 West Marketgait, Dundee DD1 9YP; is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, firm reference number 116115. Alliance Trust Savings gives no financial or investment advice.