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16 August 2019

Redmayne Bentley's Top Trades

Below, we look at the most frequently traded shares through Redmayne Bentley over the last couple of weeks and consider why they have been so popular.
 
AVON RUBBER (AVON)
Index: FTSE ALL-SHARE
Sector: Defence
Market Capitalisation: £499.48m
 
Avon Rubber has taken steps to diversify its revenue streams away from the volatile dairy sector through its recent acquisition of 3M’s ballistic-protection division. The deal has allowed Avon Rubber to bolster its product range significantly and has provided a platform to expand beyond its core US market. The group has also gained a new contract with the Department of Defence (DOD), where it will supply next-generation body armour. Such news has provided investors with confidence and has led Avon’s share price to outperform the FTSE All Share by c.21.5% since mid-April.
 
 
BURFORD CAPITAL (BUR)
Index: FTSE AIM 100 Index
Sector: Specialty Finance
Market Capitalisation: £1,698.91m
 
Burford Capital has recently been put in the spotlight through Muddy Waters stock report disclosing “trading activity consistent with material illegal activity”. This involved supposed manipulation of the IRR and ROIC on its deals, which appeared to falsely enhance the litigation finance specialist profits. This caused Burford’s stock to decline by 56.9% from market open on the 7th August to market close on the 8th August. Burford’s revenues and profits have been increasing very rapidly, but this increase has started to decline from 131.5% profit growth in the 2017 full year to 23.7% in the 2018 full year.
 
 
TESCO (TSCO)
Index: FTSE 100
Sector: Food Retailers & Wholesalers
Market Capitalisation: £20,987.46m
 
The retail sector in the UK has been struggling over the past few years and Tesco plc is no different, announcing 4,500 job losses across 153 of its Tesco Metro stores. This is one of its efforts to cut costs by £1.5bn to compete with its German budget rivals Aldi and Lidl. The market appears to have confidence in Tesco’s cost-cutting strategy, which is reflected in the 13.8% share price appreciation this year. Goldman Sachs, UBS, and HSBC have recently reissued ‘buy’ ratings and JP Morgan and Morgan Stanley have issued ‘overweight’ ratings for Tesco stock.
 
Top Trades is published every fortnight in Equity Insight, a newsletter written by our stockbrokers and investment managers. It provides market commentary, a focus on individual sectors, technical analysis, potential trading opportunities and share reviews.
 
Please note that investments and income arising from them can fall as well as rise in value and you may lose some or all the amount you have invested. Past performance and forecasts are not a reliable indicator of future results or performance. Please note that this communication is for information only and does not constitute a recommendation to buy or sell the shares of the companies mentioned.
 
Redmayne Bentley's Top Trades

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