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4 shares the pros are buying and selling

Our regular roundup of trades by professional investors, featuring St Modwen Properties, IQE and Brewin Dolphin

by David Campbell, Selin Bucak on Nov 27, 2017 at 05:00

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Key stats
Market capitalisation£881m
No. of shares out222m
No. of shares floating182m
No. of common shareholdersnot stated
No. of employees345
Trading volume (10 day avg.)m
Turnover£288m
Profit before tax£64m
Earnings per share22.05p
Cashflow per share22.42p
Cash per share1.89p

St Modwen Properties

Citywire AA-rated fund manager Mike Fox has increased his stake in urban housing and regeneration business St Moden Properties (SMP).

The ethical equity specialist upped his holding to 15.6 million shares, a 7% position in the company, up from 6.1%, worth £61 million.

The shares, which have soared 43% in the past year, are mainly held in Royal London Sustainable Leaders fund, with some held by Citywire AA-rated Henry Lowson’s Royal London UK Smaller Companies fund.

The developer recently sold a parcel of land to housebuilder Taylor Wimpey for £7.6 million. It was also selected to develop Kirkby town centre’s leisure scheme.

Four analysts have a ‘buy’ recommendation on the stock with an average target price of 435p. The shares closed at 396.5p on Friday.

Key stats
Market capitalisation£1,183m
No. of shares out686m
No. of shares floating583m
No. of common shareholdersnot stated
No. of employees475
Trading volume (10 day avg.)17m
Turnover£133m
Profit before tax£30m
Earnings per share2.72p
Cashflow per share4.28p
Cash per share0.73p

IQE

Citywire A-rated global small cap veteran Justin Thomson has upped his stake in specialist semi-conductor manufacturer IQE (IQE) as its shares break higher in a second leg of a recent parabolic climb.

Thomson upped his holding from 11.2% to 11.6% of the shares, giving him a £129 million stake.

The shares have soared more than four-fold from 38p to 178p this year. They are primarily held in his $7.6 billion (£5.7 billion) T Rowe Price International Discovery fund which he has run for almost 20 years.

IQE, which supplies components used in high-tech products such as the iPhone, has benefited from investors looking for a successor to chipmaker ARM, which was bought out for £24 billion last year.

Canaccord Genuity reiterated its buy rating last week and lifted its price target from 180p to 190p.

In an update in September it reported revenue 12% higher but a 5% dip in profits as it more than doubled investment to ‘meet higher levels of demand’ expected from next year.

Key stats
Market capitalisation£985m
No. of shares out283m
No. of shares floating246m
No. of common shareholdersnot stated
No. of employees1743
Trading volume (10 day avg.)m
Turnover£282m
Profit before tax£69m
Earnings per share13.86p
Cashflow per share18.93p
Cash per share60.72p

Brewin Dolphin

Citywire A-rated equity income stars Clive Beagles and James Lowen have pared their stake in Brewin Dolphin (BRW) as the wealth manager pulls back from recent highs to a four-month low.

The managers reduced their holding from just over 5% to 4.8%. The position in 13.8 million shares is worth £47.7 million at a share price of 346.5p.

The shares are held in their £3.5 billion JOHCM UK Equity Income fund, until recently the largest investor in the business. The managers have over the last six months trimmed their stake from almost 23 million shares, according to Reuters shareholder data.

Broker Liberum this month reiterated its buy rating on a price target of 397p.

The house has launched a strategic overhaul in recent years since abandoning an in-house IT development project. This has borne fruit with income hitting a record £77.3 million in the three months to the end of June, up 8.4% on the same period of 2016.

Greencore

Citywire AAA-rated midcap stock picker Richard Watts has sold down his holding in processed food business Greencore (GNC) as a listeria recall knocked its shares to the bottom of a three-year range.

Watts cut his investment in the company from 5.6% to 4.9% of its shares. The holding of 35.2 million shares is worth £67 million at a share price of 190p, which 41% below its 2016 record high of 322p.

The shares were primarily held in his £3.2 billion Old Mutual UK Mid Cap fund, with a smaller stake in AAA-rated colleague Luke Kerr’s Old Mutual UK Dynamic Equity fund.

Greencore had already been marked lower this year but dropped another 7% in October, after announcing a voluntary sandwich recall in the US following the discovery of listeria in a sample. The loss of a contract to supply Starbucks, and a recently announced restructure of its UK division has also hurt the shares.

Kepler Cheuvreux last week cut its target price from 290p to 250p. The shares closed at 188.5p on Friday, down 1.7%.

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  • St. Modwen Properties PLC (SMP.L)
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  • IQE PLC (IQE.L)
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  • Brewin Dolphin Holdings PLC (BRW.L)
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  • Greencore Group PLC (GNC.L)
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