Sunday share tips: Assura, Sky, Augmentum Fintech
Shares in Assura were a 'hold' for Questor in the Sunday Telegraph, the property group with a £1.4bn market value from investing in GP surgeries. However, the stock trades for 22.5 times current-year forecast earnings and a premium to net asset value, which does mark an ideal entry point for new investors, though a 4% dividend yield is more attractive.
Lord O’Shaughnessy, who has taken the chairmanship of a new NHS property board that recommended in the Naylor review, said: “Good buildings are energising for staff and recuperative for patients. Old and outdated buildings are inefficient and costly; they sap morale, impede recovery and reduce wellbeing.” FTSE 250-listed Assura owns a portfolio of 498 medical centres, valued at £1.6bn and generating rent of £87.4m a year. Doctors used to own a share of their surgeries but younger doctors are happy to rent from the likes of Assura in return for upgrading old one or developing new ones.
NHS policy directives suggest local surgeries will have to take more of the strain within the NHS system, including offering services once the preserve of under-pressure hospitals, as well as scheduling more evening and weekend appointments. In December Assura raised £310m, of which £84m had been spent by early last month, most of which on debt repayments. Analysts at Stifel forecast £138m will be spent on acquisitions in by the end of the year. With the fundraising completed at a price of 57p this will limit earnings per share growth for a year or two.
Sky shares were a 'hold' for the Sunday Times' Inside the City column after Comcast's offer to pay 1,250p a share to take over the satellite broadcaster. Comcast's tentative bid was well above the 1,075p offered by 21st Century Fox, which is still awaiting the results of a UK regulatory probe.
"The pressing question for shareholders is whether to cash out now," said the column, with Sky shares closing the week at about 1,373p on hopes a bidding war will erupt. "Shareholders should resist the temptation to sell", however, as both Comcast and Fox, as well as Disney, which has agreed to buy the bulk of Fox’s film and TV interests, all need greater scale to survive against the likes of Netflix. Netflix's 100m subscribers allows it to invest more and more in production as the cost per user is spread out, which "creates a virtuous circle: the more eyeballs, the more it can invest in productions".
Sky would double Comcast's subscriber base and give it a foothold in Europe, while Fox needs Sky in case its deal with Disney is blocked by US regulators, and Disney is desperate for a direct-to-consumer route for its channels.
Augmentum Fintech was tipped as a buy for "investors with a sense of adventure" by Midas in the Mail on Sunday ahead of its planned £100m flotation on the London main market this month. Shares in Augmentum are still available for retail investors via offer for subscription and an intermediaries offer at 100p apiece, with the pre-IPO deadline this Thursday.
Current investments include 11% of BullionVault valued by PwC at £8.4m, a 4% stake in online broker Interactive Investor, another 4% in crowdfunding platform Seedrs, 10% of family office investment software platform SRL Global and 7.4% of peer-to-peer lending platform Zopa. Lord Rothschild's RIT Capital is a backer of the business to the tune of £10m in the IPO, while directors and advisers include CEO Tim Levene ex of Betfair, plus Betfair founder Edward Wray as an adviser, while ex Mars Inc man Neil England is chairman.
Management intend to invest shareholders’ money over the next 12 months, buying 10 to 15 new companies. The group is actively involved in its portfolio companies and aims to generate value by helping businesses to grow, selling out at a profit and returning cash to shareholders as disposals are made.
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