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Sunday share tips: Stenprop, Carnival

The Mail on Sunday’s Midas column tipped shares of property investment fund Stenprop among its picks for the year ahead, pointing to the company’s diversified client base, “high demand” for its properties and “decent” dividend income to back up its case.

Stenprop is chiefly a multi-let property firm with such contracts accounting for approximately 75% of its portfolio.

That focus has helped see Stenprop through the coronavirus downturn with many companies increasingly taking space on such sites as they shift towards digital.

“Some may have had high street shops that they no longer want. Others may have sold their goods via a distributor and are now selling directly to consumers. Either way, demand for sites has held up and rent collection has been robust,” Midas explained.

A chronic shortage for such sites is another plus.

So too is its diversified client base, with 1,300 tenants hailing from sectors as diverse as brewing or solar panels.

Stenprop is also reportedly keen to start offering customers all-in-one packages, including for heating, plumbing, wi-fi and other like services.

“At £1.36, Stenprop offers good long-term value and decent income, even without its fancy new digital ideas. Add those in and the shares look even more attractive.

“Buy.”

The Sunday Times’s Jill Treanor sounded a note of caution on the outlook for the FTSE 350’s five most bombed-out stocks of 2020.

In descending order from worst to best those were Hammerson, Capita, Cineworld, Petrofac and Carnival.

Shares of the former cratered 82.3% last year while stock in the latter was down by 61.5%.

Analysts at Liberum had a ‘hold’ recommendation on stock in Hammerson and those at Shore Capital had a similar stance on Capita.

Barclays meanwhile had included Carnival in its list of potential vaccine beneficiaries.

Fitch Ratings on the other hand had recently noted Cineworld could face another ‘cash crunch’ and Covid-19 had hit Capita’s recovery plan.

In any case, the common thread running through all those companies’ trading outlook for the next 12 months was the speed of the roll-out of Covid-19 vaccines.

Nonetheless, for Treynor “given what might be politely called the NHS’s history of struggling with logistics, you would be brave to bet on a smooth ride up.”

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