Six to buy
Anglo American
The Telegraph “Profits down, a dividend cut… a rise in net debt.” This mining giant’s 2023 results made for dispiriting reading. Yet mining is a deeply cyclical business and a bottom may be near as central bankers prepare to cut interest rates and the Biden administration splurges on infrastructure. Anglo is “still a major… profitable, producer of copper and iron ore”, yet its shares trade at a discount to book value. When the cycle turns, investors may realise they’ve missed out on a bargain. 1,727p
Direct Line Insurance
Interactive Investor Belgian insurer Ageas has emerged as a suitor for its UK counterpart, although a first offer for 233p was rejected. Ageas’ status as an industry peer (rather than a mere private-equity shark) gives the bid credibility and it may seek to appeal over management’s head directly to shareholders “weary” of Direct Line’s sluggish performance. A 300p bid would probably be successful and offer significant upside; if Ageas withdraws its interest the likely downside is more limited. This seem a favourable risk/reward bet for speculators. 204p
Elixirr International
The Mail on Sunday Often criticised for embodying “the worst excesses” of corporate capitalism, the global management consultant industry is still growing by between 10% and 12% a year. This small advisory firm is outgrowing industry giants by being nimbler and drawing on a global network of technology experts to offer bespoke solutions, not the generic advice for which consultants are often criticised. That approach has helped Elixirr land major clients, including Tesla and LVMH. 550p
ME Group International
Shares This self-service specialist operates laundry machines and photo booths across 19 countries. It enjoys a dominant market position through its 44,000 vending machines, while site owners are keen to have the machines as a way of increasing footfall. The estate is being digitalised, increasing the number of repairs that can be performed remotely without needing to send out an engineer. On 11.8 times earnings the shares are too cheap for a high-quality business with excellent margins and scope for expansion. 160p
Playtech
Investors’ Chronicle Shares in this FTSE-250 gambling business have dropped by a fifth over the past year amid a complex legal dispute with a Mexican joint-venture partner. But the gloom is overdone and the shares now trade at a marked discount to many industry peers across a range of valuation metrics. That’s
