Three to sell

Dechra Pharmaceuticals The Mail on Sunday

Dechra Pharmaceuticals, a veterinary-drugs business, has benefited from surging demand for pets in the pandemic. It posted strong double-digit operating profit and sales growth and an 18% increase in dividend in the year to 30 June. But the boom is subsiding. CEO Ian Page has noted a decline in the number of vet visits in the US, while rival Zoetis has also reported a slowdown. A valuation of 40 times forward earnings is thus difficult to justify. “No matter how much we love our pets, there is a limit to how much we are prepared to spend.” Time to sell. 4,974p

EnQuest Investors’ Chronicle

North Sea driller EnQuest’s “uninspiring” half-year update saw shares drop sharply after it revealed that daily net production had fallen by 30% . Output was hit by an “unplanned third-party outage”. The company has implemented measures that are expected to improve output gradually, but average daily group production is still set to disappoint. Daily production from its Kraken field also dropped by 30% thanks to natural decline. There “is little cheer for investors”. 23p

Oatly The Motley Fool

Oatly investors have had a “wild ride”. The stock of the distributor of oatbased milk, yogurt and frozen desserts is on the slide. Sales growth is rapid but shortseller Spruce Point Capital Management has cast doubt on some of the group’s financial metrics and its sustainability practices. Several class action lawsuits have emerged.

Oat milk is also ultimately “a commodity that will only become more competitive over time”. $18