SHARE PUNT OF THE WEEK

WHO IS IT? McColl’s – a relative minnow in the world of grocery retailing – has more than 1,600 convenience stores and newsagents around the UK. It operates under the McColl’s, Martin’s and RS McColl names and has also recently revived the Safeway brand.

WHAT’S THE LATEST? Over the summer, £150m was wiped off its market value after what chief executive Jonathan Miller called a period of ‘unprecedented disruption’. One of its key distributors collapsed last year, which hit profits even though sales had been rising.

WHO BACKS IT? Klarus Capital is the largest shareholder. Aberforth Partners, a firm which invests in companies which it thinks are undervalued, also owns a sizeable stake – as does activist investor Laxey Partners, which generally pushes companies to improve. Other wellknown fund managers also feature in the topten investors, including Miton, Chelverton, Fidelity and Legal & General.

WHY YOU SHOULD INVEST David Jones, chief market strategist at online trader Capital, suggests the pessimism among investors might have been overdone and a turnaround may be on the cards. The new Safeway brand has been selling well, and the company has become a good dividend payer.

. . . AND WHY YOU SHOULDN’T The obvious risk comes from the big supermarkets. ‘If the likes of Sainsbury’s and Tesco decide to further expand their smaller stores, then this is going to put the squeeze on the likes of McColl’s,’ Jones says. ‘And as usual there is the ongoing threat of Amazon continuing to encroach in this space – but even the US giant can’t beat the convenience of nipping around the corner for that forgotten pint of milk just yet.’