MoneyWeek’s comprehensive guide to this week’s share tips

Three to buy

Hargreaves Services The Mail on Sunday

This former coal-mining company owned 17,000 acres of land a decade ago. It retains 11,000 now, which it’s cleaning up to convert into space for homes and businesses. It currently has several ongoing developments and a strong pipeline. Its trading, recycling and industrial-services arms are also performing well, and are expected to grow over the next five to ten years. The company has pencilled in a dividend of 20p for 2022, putting the stock

Two to sell

Rentokil The Daily Telegraph

Pest-control expert Rentokil is buying US rival Terminix for $6.7bn (£5bn) – just over half of its own market value of £9.5bn. Its shares “have taken quite a battering since” as investors question the deal.

If Rentokil is overpaying “at least it will be doing so largely in its own shares rather than in cash”, which should cushion any impact on its balance sheet. What’s more, the share price had risen strongly in the last few months, “so if Rentokil on a yield of 5% at the current price. 400p.

Marks & Spencer Shares

High-street retailer

Marks & Spencer has further to go. The company “continues to demonstrate strong progress in transforming the business”. It hada stronger third quarter than analysts had predicted – sales for the 12 weeks to 1 January climbed to £3.27bn, up 18.5% from the previous year, and is overvaluing Terminix it is at least paying for it in an overvalued currency”.

But “this does not… make everything fine”. Those who get the new shares – Terminix’s current shareholders – could decide they want to sell, which might well lead to a “torrid time for Rentokil’s share price”. Steer clear. 512.6p.

Currys The Sunday Times

Currys – previously known as Dixons Carphone – has 829 shops and 35,000 employees were 8.6% higher than in the same period in 2019. This was mostly driven by its clothing and home sections: sales for both were up over 50% on a two-year basis, “which suggests that the firm has finally got its web offering right”. Food sales were “also outstanding”: M&S grew the most rapidly of any store-based food retailer during the quarter and had its highest ever Christmas till roll. 221p.

“selling everything from washing machines to laptops”. Sales growth over Christmas slowed due to supply-chain issues and inflationary concerns and the company has cut its profit guidance for the year.

Mr. Cooper Group Barron’s

This US mortgage firm is unusual because it profits from rising rates. About half its revenue comes from servicing loans – a higher percentage than any competitor. It also owns Xome, an auction platform for foreclosed properties, whose business is picking up after the expiry of a moratorium on foreclosures. It hopes to sell Xome, which could be worth between $750m and $1bn – roughly 20%-30% of its total market cap of $3.2bn. $41.34.

Part of the sales decline was due to Currys “having had a good 2020” as people invested in home entertainment.

But it remains to be seen whether spending habits will be maintained now that restrictions are ending.

The group shut down over 500 shops in 2020, but has yet to acknowledge the need to reduce its bricks-and-mortar presence further. Shares have fallen 16% so far this year, but “if a further restructuring is on the cards, there could be more pain to come”. 99.2p.