MoneyWeek’s comprehensive guide to this week’s share tips Five to buy
Billington Holdings
The Mail on Sunday
This Barnsley-based steel group’s products are used to build everything from renewable-energy plants and data centres to delivery warehouses and mediaproduction facilities. The firm’s “engineering expertise and high-quality workmanship” is attracting new business, with the order book doubling in 12 months. In 2022 profits rose fourfold to £5.8m and the payout quintupled. The building trade is highly cyclical, but this well-run company has shown “true grit... The shares should go far”. 415p
Churchill China
Interactive Investor
Renewed optimism that a global recession can be avoided is especially palpable in small caps such as this £144m ceramics firm, which produces plates, mugs and cookware for the hospitality and retail sectors. About 40% of group sales come from the UK, with the second-largest market in continental Europe. Management defied Brexit trade woes to grow sales in Europe by 32% last year. Rising energy costs are a challenge, and on 21 times earnings the shares aren’t cheap, but “on a two-year view... Churchill’s strengths will show through”. 1,310p
Computacenter
Shares
Investors wanting tech exposure need not look across the Atlantic. This British IT infrastructure supplier supports “millions of end users in more than 70 countries”. Last year’s results showed a 29% rise in revenue and 9.1% rise in gross profit on the year before. Given the wider IT slump, those strong results testify to the firm’s robust market position. The business is very cash generative and pays a 3% dividend yield; trading on a price/earnings (p/e) ratio of 13, the shares look cheap for the sector. 2,262p
Henry Boot
The Sunday Times
This 135-year-old property developer is less well known than some of its listed peers, but it was the first quoted housebuilder when it floated in 1919. The shares have slipped by 31% over the past year as a weak housing market hit land sales, which account for about half of profits. Yet the firm’s diverse land bank and robust balance sheet give it strong foundations, and on a p/e of 13 the shares offer long-term value. 233p
Volution Group
Investors’ Chronicle
“An ill wind has blown through the building materials market over the past 18 months” but this supplier and assembler of ventilation kit has proved more resilient than most. The Covid-19 pandemic has refocused attention on the importance of ventilation and air quality. The UK changed regulations last year to set higher ventilation standards for builders of new properties. The resulting demand for Volution’s expertise helped deliver a 9% rise in sales for the half year to 31 January. The shares are no screaming bargain, but solid operating margins and scope to consolidate a fragmented market make for an auspicious outlook. 437p