Five to buy
Datadog
Shares This US-based cloud-software service should be one of the big winners from the artificial-intelligence (AI) boom. Its tools monitor clients’ servers and databases to troubleshoot problems on behalf of 25,000 firms worldwide. AI requires vast quantities of data, thus greatly expanding Datadog’s potential market. This is a competitive area, requiring heavy research and development spending that has led to losses, but 2023 is likely to have seen a “profits breakthrough”. $133
Spectris
The Telegraph This FTSE-250 precision instruments, technology equipment and software business is precisely the sort of excellent British company that gets overlooked because it is listed on the unfashionable London market. Yet operations are globally diversified, with just 4% of revenue coming from Britain. A strong order book adds stability, while a “solid financial position” allows management to buy back shares. On 18 times forecast earnings the shares are not cheap, but still offer good value when compared with the rapid rate of profit growth. 3,525p
Tertre Rouge Assets
The Mail on Sunday This classic car business aims to give ordinary investors access to a market traditionally dominated by wealthy insiders. Tertre Rouge, which is named after a famous bend on the Le Mans circuit, is raising £50m through a share issue, and plans to invest in an initial portfolio of six prime vehicles, as well as auxiliary ventures such as a classic-car touring business. The management team is well connected in the motoring world and the near-£35bn classic-car market is growing at a clip. 105p
Unilever
The Sunday Times The cost-of-living crisis has prompted consumers to “trade down” from Unilever’s brands, which include everything from Marmite to Persil. Volumes across Europe fell almost 11% in the third quarter of last year as consumers baulked at price rises, opting for better-value alternatives instead. The shares have now slid to just 16 times forward earnings, a big discount to the historic average of 24 – not a bad price at which to snap up a highly diversified portfolio and “deeply reliable dividend”. 3,700p
Wickes Group
Interactive Investor This small home-improvement retailer has fared better than some rivals in the recent tough trading environment owing to positioning itself as “a value retailer for home maintenance”. A recession this year would be bad news, but the risk is compensated for by an attractive near-7% dividend yield. In the longer
