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5 shares the pros are buying and selling

Our regular roundup of trades by professional investors, including four Citywire AAA-rated fund managers' latest buys

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Key stats
Dividend yield 3.4%
Market capitalisation £261m
No. of shares out 102m
No. of shares floating 58m
No. of employees 4,700
Trading volume (10 day avg.) 0.1m
Turnover £400m
Profit before tax £28m
Earnings per share 14.09p
Cashflow per share 23.60p
Cash per share 2.24p

Clipper Logistics (CLG)

Who’s trading? Citywire AAA-rated Anthony Cross & Julian Fosh

The trade: Liontrust’s UK equity stars again upped their stake in warehouse and delivery firm Clipper Logistics from 13.4% of the shares to 14%.

How have the shares performed? Clipper, which works with high street majors such as John Lewis and Marks and Spencer, has halved from 475p in early 2018 to Friday’s 239p as a chill wind has blown through UK retail.

What does the company say? Despite investors treating it as a direct proxy on battered bricks and mortar retail, Clipper pointed out its pre-tax profit climbed almost 17% in six months to November on a 17% increase in the revenue generated by online deliveries. ‘We have a strong new business pipeline,’ the company added.

What’s the outlook? The company also reported a potential boost to its warehousing division last month saying customers, especially tobacco firms, were stockpiling inventory to guard against any Brexit disruption. Analysts rate it a ‘buy’ on a two-to-one margin on a median target price of 391p. 

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Key stats
Dividend yield 0%
Market capitalisation £42m
No. of shares out 160m
No. of shares floating 150m
No. of employees 60
Trading volume (10 day avg.) 0.1m
Turnover £25m
Profit before tax £-11m
Earnings per share -10.90p
Cashflow per share -10.52p
Cash per share 27.33p

Summit Therapeutics (SUMM)

Who’s trading? AAA-rated David Pinniger

The trade: Polar Capital’s biotech star upped his stake in UK sector champion Summit Therapeutics from 0.7% of shares to 6.4% worth around £1.1 million.

How have the shares performed? Summit plummeted from 190p in June last year after reporting that a treatment for a rare fatal muscle disorder had flopped in trials, and remains almost 90% lower, trading on Friday at 26p.

What does the company say? Backers have severely downgraded the closely-held stock, but the firm convinced billionaire veteran biotech executive Robert Duggan to invest $25 million (£19.8 million) last month at around 25p a share. Losses sharply widened at the end of 2018 but the business pointed out it remained well-capitalised.

What’s the outlook? While loss-making businesses are par for the course in the highly speculative biotech sector, the near nine-fold plunge into the red in the three months to November, from a loss of £900,000 out to £8.1 million, is still considered a steep and sudden change of fortune.

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Key stats
Dividend yield 8.4%
Market capitalisation £423m
No. of shares out 199m
No. of shares floating 197m
No. of employees 11,186
Trading volume (10 day avg.) 0.6m
Turnover £1,135m
Profit before tax £114m
Earnings per share 27.54p
Cashflow per share 45.12p
Cash per share 13.56p

Zotefoams (ZTF)

Who’s trading? Citywire A-rated Roland Arnold

The trade: The BlackRock UK small cap manager was among a series of holders to recently top slice their stake in Zotefoams, from 11.5% of the shares to 10.7%.

How have the shares performed? Shares rocketed in late December after fund giant Oppenheimer revealed it had taken a stake of more than 5%, hitting an all-time record of 706p, and were on Friday trading at 674p.

What does the company say? The high-tech materials business reported ‘record’ third quarter sales as it upgraded its profit forecast for the first nine months of the year, on a 16% increase in revenue for the period. Boss David Stirling said the firm had made ‘substantial progress’ and he was ‘confident about the future prospects’.

What’s the outlook? City brokers rate the stock a ‘buy’ at a ratio of three to two but the surge of interest has carried shares to well above a median price target of 606p and a price-to-earnings multiple of 30 times next year’s forecast, almost three times richer than the sector average.

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Key stats
Dividend yield 6.5%
Market capitalisation £58m
No. of shares out 16m
No. of shares floating 15m
No. of employees 195
Trading volume (10 day avg.) 0m
Turnover £22m
Profit before tax £5m
Earnings per share 22.73p
Cashflow per share 29.88p
Cash per share 91.16p

Zytronic (ZYT)

Who’s trading? Citywire AAA-rated James Baker

The trade: Chelverton’s UK growth fund manager increased his stake in touch screen manufacturer Zytronic from 5% to 7.5%.

How have the shares performed? The firm has had its share of troubles over the last 12 months, with the shares falling from around 500p to 370.5p.

What does the company say? A slowdown in sales at the touch screen technology business impacted profitability, with pre-tax profit in the year to September falling 22% to £4.2 million on revenue of £22.3 million, down 3%. The company’s shares fell on the back of the results, which it said were impacted by the performance of the financial market.

What’s the outlook? The management of the company said that over the next year it would look to improve margins by securing new projects and creating efficiencies in production. Zytronic is set to demo a new hybrid touch technology in February. And despite lower profits the business was able to increase dividends for shareholders by 20%.

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Key stats
Dividend yield 4.4%
Market capitalisation £110m
No. of shares out 21m
No. of shares floating 14m
No. of employees 186
Trading volume (10 day avg.) 0m
Turnover £106m
Profit before tax £14m
Earnings per share 44.38p
Cashflow per share 53.07p
Cash per share 163.20p

Character Group (CCT)

Who’s trading? Man GLG’s Henry Dixon  

The trade: Dixon has reduced his holding in the international toy and game distribution company Character Group, held across his UK Income and UK Undervalued Assets funds, from 6.1% to under 5%.

How have the shares performed? The AIM-listed firm’s shares have risen from around 450p 12 months ago to 510p. The company posted an upbeat trading update in September, saying profits were in line with market expectations and it was confident its tie-up with Danish firm Proxy will be a driver of growth.

What does the company say? Character Group reported record sales in the second half of the year, with its established ranges, including Peppa Pig and Teletubbies in demand, while new products such as Pokémon and Treasure X performed strongly.

What’s the outlook? The company’s management was upbeat heading into the key Christmas trading period, highlighting its push into ‘craze’ or impulse purchase items, such as Cakepop Cuties and Cra.Z.Slimy. It has also announced a £5 million share buyback programme.

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