So what’s driving this bullish stance? And which stocks should investors be considering for their portfolios today?

Why is Barclays so bullish?

The investment bank started explicitly recommending investors to go overweight on both UK shares and European ones as well towards the end of 2025. And the three central pillars to their investment thesis are:

1. Cheap valuations compared to US equivalents.
2. Earnings growth is on track to accelerate, driven by stronger operating leverage and fading foreign exchange headwinds.
3. The artificial intelligence (AI) supercycle is maturing with capital concentrated in the US tech sector starting to rotate into new markets.

Low prices, stronger earnings, and capital rotation definitely set the stage for a more impressive stock market performance in 2026. However, while Barclays is optimistic, the bank’s flagged several key risks that could undermine returns.

The list of primary concerns includes geopolitical and trade escalation, citing the conflict in the Middle East and the US tariff escalation. Also on the list is the risk of bond vigilantes driving up the yield on UK gilts which, in turn, compresses stock market valuations.

So with all that in mind, which FTSE shares does Barclays recommend UK investors take advantage of today?

Opportunities at a discount

Barclays has a lot of active stock recommendations in 2026. But just last month, it upgraded its conviction for Molten Ventures (LSE:GROW), placing a 575p share price target – almost 24% higher than where the FTSE share is trading today.

So what does this business do?

Molten Ventures is quite an unusual investment compared to most UK stocks. The company’s essentially a publicly-listed venture capital group that focuses exclusively on early-stage European technology companies.

It’s effectively a way for everyday investors to indirectly invest in private companies. And the portfolio already contains some fairly big names, including digital bank Revolut.

Following its investor day in February, management showcased several investments approaching the exit-readiness stage, having already delivered some exits totalling over £100m.

Top that off with the fact that Molten Ventures’ shares trade at a significant discount to their net asset value, and shareholders could soon see an upward surge in the short-to-medium term.

So is this a no-brainer?

What to watch

With the stock trading at a discount, it’s quite tempting to start snapping up shares. However, it’s important to highlight some crucial risks when investing in venture capital groups.

The most apparent risk is that the timelines for exits are a bit of a mystery. And with the financial markets currently in a risk-off mindset, IPOs or trade sales may end up getting delayed.

But even if that doesn’t happen, and Molten Ventures sees a big payday, management then has the challenge of finding new early-stage businesses to support – investments which are notoriously high risk.

Nevertheless, for investors with a higher risk tolerance seeking to diversify their portfolios into the private sector at a substantial discount, Molten Ventures could indeed be worth mulling over.

The post Buy cheap FTSE shares, says Barclays appeared first on The Twelfth Magpie.

[Just beginning your investing journey? Check out our guide on how to start investing in the UK.]

BAE Systems 

What it does: BAE Systems is one of the world’s leading defence companies and a major supplier to UK and US armed forces.  

By Royston Wild. Defence giant BAE Systems (LSE: BA) is the best-performing FTSE 100 share over the past six months at the time of writing. 

In fact, it’s risen around 40% in value in the year to date. And more recently its share price has remained rock-solid whilst other UK shares have toiled in this new bear market. 

I think the Footsie firm remains an ideal growth stock for me to buy today. Soaring inflation and growing recessionary risks pose a threat to more cyclical stocks. Defence stocks like BAE Systems, on the other hand, can expect trading conditions to remain robust in the near term, meaning investor selling should be kept to a minimum. 

Government defence spending is something that remains broadly resistant to wider economic conditions. War is a constant of history and countries have to be prepared to defend themselves at a moment’s notice. 

This explains why City analysts think BAE Systems’ annual earnings will rise 7% in both 2022 and 2023. This is despite the threat that supply chain problems pose to its operations. 

Royston Wild does not own shares in BAE Systems. 

Experian

What it does: Experian provides credit data to lenders to allow them to assess the creditworthiness of potential borrowers.

By Stephen Wright. I’m keeping things simple with my top UK growth share for July. 

In my view, a good growth stock is one that grows. Specifically, it grows its earnings and then uses those earnings to generate more earnings. This is exactly what Experian (LSE:EXPN) does. 

The company’s strong growth is protected by a high barrier to entry. Experian has a huge database of credit information that it bases its credit scores on, and this would be difficult for a smaller competitor to emulate.

Furthermore, most mortgages require a tri-merge report. Experian’s credit report is part of this, which makes me think that the business will continue to do well going forward.

I’m impressed by the company’s growth and I think that shares trade at a reasonable price at the moment. As such, I’m looking at adding to my investment in Experian stock in July.

Stephen Wright owns shares in Experian.

Coats

What it does: Coats is the world’s leading industrial thread manufacturer. It operates in sectors including fashion, energy and telecoms.

By Roland Head. Thread maker Coats (LSE: COA) is a business that many investors have never heard of, even though we probably all use its products.

This British business has been trading for more than 250 years and operates in 50 countries, with annual sales over $1.5bn.

Analysts expect Coats’ earnings to rise by 13% this year and by 17% in 2022. Despite this positive outlook, the shares currently trade on just 10 times forecast earnings. I reckon that’s too cheap for a business which generated a 21% return on equity last year.

I admit that Coats has disappointed the market before. Demand for some of the company’s products could also fall in a recession.

However, I think the diversity of Coats’ customers should provide protection against localised problems. I’m also impressed by the changes being put in place by CEO Rajiv Sharma. I expect strong growth over the next few years.

Roland Head owns shares in Coats.

JD Sports Fashion

What it does: JD Sports Fashion is a retailer of athletic footwear and athleisure clothing that operates globally.

By Edward Sheldon, CFA. Shares in JD Sports Fashion (LSE: JD) have taken a huge hit in 2022, and I think this has presented me with a great opportunity to buy the growth stock in July.

JD’s full-year FY2022 results, posted in June, were very encouraging to my mind. For the 52 weeks ended 29 January 2022, revenue came in at £8.56bn, up 39% year on year. Meanwhile, adjusted earnings per share (EPS) jumped to 12.8p versus 6.4p a year earlier.

Looking ahead, I’m not expecting growth to continue at this pace. However, in the long run, I expect demand for casual attire to boost revenues and profits significantly.

One risk to consider here is a pullback in consumer spending due to the cost-of-living crisis. This could hit sales. However, with the stock now trading on a forward-looking P/E ratio of under 10, I think a lot of this risk is priced into the stock already.

Edward Sheldon has no position in JD Sports.

Future

What it does: Future is a massive media conglomerate serving digital media on a variety of topics to a global audience of over 300 million people.

By  Zaven Boyrazian. Investing in a media publishing house may sound old fashioned. But it’s proven to be a lucrative move for shareholders of Future (LSE:FUTR). The company is one of the largest media groups in the world, with over 250 websites under its umbrella, including TechRadar, Country Life, and its recently acquired Who What Wear. And over the last five years, the stock is up 700%!

Revenue is primarily generated through advertising and subscriptions. But with more service platforms like GoCompare emerging in its brand portfolio, the company has begun earning considerable income through affiliate fees.

Despite delivering high-double digit growth so far this year, shares have since taken quite a tumble thanks to investor sentiment waning. There are undoubtedly risks surrounding management’s primarily acquisition-driven approach. However, with an excellent track record, I can’t help but see this slump as a buying opportunity for my investment portfolio.

Zaven Boyrazian does not own shares in Future.

Molten Ventures

What it does: Molten Ventures is a UK-based tech-focused venture capital firm with a track record of backing now-listed businesses from very early stages.

By Andrew Woods. Molten Ventures (LSE:GROW) performed well during the pandemic. For the year ended March, between 2021 and 2022, pre-tax profit grew from £267m to £325m. The value of the firm’s gross portfolio also rose from £984m to £1.53bn over the same period.

The company’s most exciting performance, however, is in its earnings-per-share (EPS) growth. Between 2018 and 2022, EPS rose from 89p per share to 200p. By my calculation, this means the firm had a compound annual EPS growth rate of 17.6%. While past performance is not necessarily indicative of future performance, this growth rate is extremely attractive.

The company’s most recent net asset value (NAV) was 937p per share in March. While this is now a few months old, it’s clear that the current share price of 460p is a significant discount. Despite this, the broader economic environment has hit tech stocks particularly hard. There may be a further slide as inflation increases and interest rates continue to rise.

Andrew Woods does not own shares in Molten Ventures.

Renalytix

What it does: Renalytix develops and sells medical devices that can diagnose risk indicators for kidney disease.

By Christopher Ruane. I own shares in Renalytix (LSE:RENX) and so far it has been an absolute dog! The shares have lost 85% of their value in the past year alone. Definitely there are still risks here, such as the substantial costs required to sell the company’s system into more healthcare providers.

But I also see a potentially fantastic opportunity if things go well. There is clinical evidence that the technology can help improve diagnostic outcomes. A presentation this month revealed its positive impact at a leading New York healthcare provider.

Kidney disease is the direct cause of over a million deaths globally each year. If Renalytix can sell its innovative, proven system into more healthcare groups, the scalability of its business model could generate higher revenues without adding costs at the same speed. In the long term I remain optimistic about the outlook, but recognise the risks involved.

Christopher Ruane owns shares in Renalytix.

Spirax-Sarco Engineering

What it does: Sprirax-Sarco Engineering is a UK-based industrial engineering company focused on thermal energy management

By Paul Summers: Cheltenham-based Sprirax-Sarco Engineering (LSE: SPX) is a high-quality company I’ve been monitoring for a while now. A world leader at what it does, the FTSE 100 member has long generated high margins and returns on the capital it invests. It’s these hallmarks that have been found to reward growth investors like me handsomely over time.

The only problem with all this is that the stock has always looked extremely expensive. Until now, that is. A 40% slide in the share price in 2022 leaves Spirax trading at almost 28 times earnings. Granted, that’s still not cheap. However, the idea of beginning to build a position here for the long term now looks far more palatable. 

There’s always a chance things could get worse before they get better if we get a recession. However, high customer loyalty should mean the pain should be temporary.

Paul Summers does not own shares in Spirax-Sarco Engineering

Carnival

What it does: Carnival operates a list of renowned cruise line brands. It sells deals and cruise packages to popular destinations.

By John Choong. Carnival (LSE:CCL) was close to hitting a five-year low in June, but positive guidance provided in its most recent trading update sent its share price rocketing by more than 10%. While this is minuscule on the wider scale of things, there are reasons to be optimistic about a potential recovery.

Despite the firm missing analysts’ estimates on earnings per share, revenue and room occupancy rate, revenue grew by almost 50%. More importantly, I was impressed with the company’s future bookings. The figure came in nearly double of Q1 2022, marking its best figure since the beginning of the pandemic. This is something to cheer for, because future bookings bring in the much-needed cash Carnival requires to return to profitability.

Provided that travel tailwinds continue to persist, Carnival could pull off a monumental recovery, pay off its debt gradually, and even achieve positive free cash flow soon. As such, grabbing shares at the current price could be a steal for years to come.

John Choong has no position in Carnival

The post Best British growth shares for July appeared first on The Twelfth Magpie.

• Molten Ventures and Hochschild Mining have extremely competitive earnings growth records
• They provide welcome diversity to my portfolio
• The companies are well-run, profitable, and expanding  

The FTSE 250 index can be an excellent place to find exciting growth stocks for long-term gains. I believe I’ve found two ‘no-brainer’ companies to purchase for my own portfolio. They come from the mining and technology sectors and, therefore, enable diversification in my own holdings. Why should I buy these two stocks? Let’s take a closer look.

A FTSE 250 miner

Hochschild Mining (LSE: HOC) is a silver and gold mining company operating in Argentina, Chile, and Peru. It is clear that this stock has been performing year in, year out for its shareholders.

The calendar years from 2016 to 2020 tell a story of extraordinary growth. The earnings per share (EPS) data from 2016 was ¢0.11, rising to ¢6 in 2020. What this means is that the company’s EPS has a compounding annual growth rate of 122%. This is competitive by any standard and is a major reason why Hochschild Mining stands out to me on the FTSE 250.

Furthermore, a production report for the 2021 calendar year revealed that the company was producing gold and silver with all-in costs per ounce of $1210 and $14, respectively. At current levels, Hochschild’s production costs are 33.7% and 39% below the market price. The company will inevitably benefit when it sells these precious metals to market.

With the upcoming US Federal Reserve rate hike, however, I am concerned that the underlying silver and gold prices will be negatively impacted. While this is possible, there is not actually a strong historical correlation between rate hikes and commodity slumps.

The FTSE 250 stock will soon acquire Amarillo Gold, based in Brazil. This is an example of how the management is eager to expand and fits the “long-term strategy of acquiring and optimising development stage projects”. Hochschild is clearly thinking long term.

An exciting tech stock

Molten Ventures (LSE: GROW) is similar in terms of its earnings growth. For the 2017 fiscal year, EPS was 80.8. By the same period in 2021, this figure stood at 208. By my calculations, this results in a compounding annual growth rate of 20.8%. While this FTSE 250 stock is not as competitive as Hochschild Mining, it is certainly strong and consistent.

Another factor that makes Molten Ventures attractive is its profitability. Between the fiscal years 2017 to 2021, profit has grown from £33.68m to £267.45m before tax. This strongly suggests that the stock’s business model of finding early stage tech companies is working.

Indeed, it has a strong record of finding companies that have later listed publicly. These include Trustpilot Group and Cazoo Group. Furthermore, the FTSE 250 stock is recycling its earnings efficiently, investing £259m in 12 primary and 15 secondary projects for the 2022 fiscal year.

In spite of this, the recent tech sell-off impacted Molten Ventures and is concerning. However, I believe this is a short-term problem that will subside in the near future. The company stated this month, for instance, that it was enjoying “continued momentum”.   

Both of these stocks are ‘no-brainers’ in my opinion. The growth records speak for themselves and suggest that both companies are performing for their shareholders. By investing in mining and tech, I will also further diversify my portfolio. I will be buying shares in both stocks immediately.

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If I had £10,000 to invest, what amount of dividend payments would I have received from 2016 to 2020 from Unilever shares? In total, I would have received £1,520 in dividends over those five years – equivalent to 15.2% of the original holding itself. This, together with any growth in the share price, tells me that this is a low-risk investment. Personally, I would not be directing £10,000 to Unilever shares, because I think I can get better returns elsewhere. With a much larger sum of money, however, this dividend yield becomes a more attractive option. If I were considering a £100,000 investment, for example, Unilever may be one of the better destinations. 

If this level of dividend yield is not attractive for me, where else could I put my £10,000? Instead of focusing on income, I could find a smaller-scale accumulation stock with big potential. Molten Ventures (LSE: GROW) is a FTSE 250 stock that gives investors exposure to private tech companies. This company does not pay a dividend and instead retains its earnings. These retained earnings may be found in company annual reports and Molten Ventures figures show impressive growth over the last five years – about 77.2% year-on-year. Together with other fundamental factors, retained earnings may give clues about how well an accumulation stock is actually growing. Essentially the main question to consider is whether a stock like Molten Ventures is putting the earnings to good use or is it preferable to have this money paid out of the stock to shareholders.

If I decided to choose an accumulation stock, I would first need to ask myself a number of questions. Am I confident in the company’s leadership? Is the leadership following through on promises? Is the company growing? In Molten Ventures’ case, only two years ago the then-AIM 100 listed company publicly stated its desire to enter the FTSE 250, which was achieved this year. Furthermore, a number of private companies funded by Molten Ventures have gone public, including Cazoo, Trustpilot and UiPath. For me, both these factors are strong indications that Molten Ventures is deploying retained earnings effectively and I think my £10,000 would be better invested in this stock rather than in Unilever for its dividends. My decision might be different if the amount available to invest was much greater, when I might deem the dividend yield to be significant.   

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Molten Ventures reports strong results

The stock rose by almost 5% yesterday from the day before. And it is up by another 1.3% in today’s trading as well. This increase follows the release of its interim results for the six months ending 30 September 2021 yesterday. The company showed a smart increase in its gross portfolio value from the comparable period last year. 

It has also seen a rise in its net asset value since then. Importantly, the company is in the right sector at the right time. As it notes in its results release, the pandemic has accelerated the shift towards more online activity.

Investors like the FTSE 100 stock

It is little wonder then that Molten Ventures has not just seen good growth, but has also found favour among investors. In the past year, the stock has risen by almost 40%. It has seen almost runaway growth since the stock market crash of March 2020. By October last year, it was already back to its pre-pandemic highs. And by early September this year, it was at almost double its pre-pandemic levels. It has fallen since, but still remains quite elevated compared to where it was before the pandemic. 

As a result, it is a bit expensive if I compare its net asset value per share to its share price. But I reckon that is only because the outlook for the stock is strong. The company says in its latest results that “…. portfolio growth is already well ahead of our stated financial objective of 15% gross portfolio fair value growth for this financial year, and our portfolio continues to perform strongly”.  

Would I buy it now?

With the omicron coronavirus variant wreaking havoc at the stock markets, I think investor demand for its stock will only grow stronger now. And I think that explains why it is still robust even while the rest of the market falls. 

However, like with all my investments, I find it instructive to remember that the situation might change anytime. If the virus comes under control and the FTSE 100 index rallies again, the Molten Ventures’ stock could fall. After all, November has not been a good month for the stock until yesterday, even though the markets were strong for most of it. I do not think this is a coincidence but a reflection of the fact that it looks like a good stock to buy when our technology dependence looks like it will increase. 

On the whole, I like this FTSE 100 stock. But I do believe that it has run up quite a bit already. I would buy it on a dip. 

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Still, I’m comfortable with the level of risk involved with such a strategy. As such, here are three high-growth UK shares I’d buy for my portfolio today. 

UK shares I’d buy 

The first company on my list is retailer Pets at Home (LSE: PETS). It was recently reported that thanks to a lockdown surge in pet ownership, the demand for pet products had reached “unprecedented” levels.

Pets at Home is the largest single retailer of pet products in the country, in a highly fragmented industry. This gives the company economies of scale and the ability to achieve better deals from suppliers. 

Thanks to the rising demand for pet products and petcare, earnings per share are expected to increase 50% in the current financial year, and a further 11% in 2023. There’s no guarantee the company will hit these targets, but I think they clearly illustrate its potential. 

Currently, the company has a near-monopoly on the UK pet market, but that could change. There’s room for another entrant, and this could drive a price war, which would almost certainly hurt the retailer’s growth. 

Despite this risk, I’d buy the company for my portfolio today, considering its growth potential. 

Growth market 

The other stock I’d acquire for my portfolio of UK shares is Vistry (LSE: VTY). I’m encouraged by the outlook for the UK housebuilding sector. As the demand for properties increases, I think homebuilders such as Vistry may report rapid earnings growth.

Analysts believe its net profit could jump from £138m in 2019 to £308m by 2022. Once again, I think these numbers show the group’s potential, although it isn’t guaranteed to hit City growth estimates. 

Indeed, a sudden increase in interest rates, or change to the tax regime, could significantly impact demand for properties across the country. This would weigh on Vistry’s growth. The business may also face margin pressure due to rising costs. 

Nevertheless, considering the outlook for the homebuilding industry in the country, I’m excited by Vistry’s potential. That’s why I’d buy the high-growth stock for my portfolio of UK shares. 

Growth investor

Draper Esprit (LSE: GROW) is a UK-based venture capital enterprise that invests in technology companies in Europe. I think this makes the firm a unique business among UK shares. It’s not what I’d call a high-growth business itself, but it does own stakes in high-growth organisations.

This reduces the risk of buying growth stocks directly, in my opinion, because the company owns a diversified basket of investments. It’s also a specialist growth investor. Therefore it knows far more about the industries it invests in than I do. 

That said, this doesn’t mean the company won’t make mistakes. There’s always going to be a chance the group might end up investing in an enterprise that fails. This would hurt its growth rate. 

But as a way to invest in a diverse portfolio of growth investments, I’d buy Draper Esprit. 

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The firm released its full-year results yesterday. The numbers were encouraging, but what really caught my eye was that it’s upgrading to the London Stock Exchange’s main market. I’d still buy the AIM stock and here’s why.

The results

Draper Esprit is a venture capital firm that invests in high-growth tech firms in Europe. The gross value of its portfolio at the end of March 2021 grew to £984m from £703m the previous year.

The company generated £206m in cash proceeds from a series of successful exits, including Peak Games and TransferWise. It also made money from its partial disposal of Trustpilot.

The AIM stock has performed well in the pandemic due to the accelerated transition to digital services. This has clearly paid off for Draper Esprit’s portfolio of companies.

During the year, the venture capitalist has made a number of new investments in companies like Cazoo, the British digital used car marketplace, as well as PrimaryBid,  a technology platform that allows retail investors fair access to public companies raising capital.

The upgrade

As I previously mentioned, what really was the icing on the cake was that the company is looking to move from AIM to the main market. But what’s the point of this and is it good for the stock?

The company has clearly grown and matured. Typically, a firm will list on AIM to raise money and expand its profile. Draper Esprit has done this and so the natural progression is to upgrade to the main market.

This should be good for the company’s future development as it should raise the firm’s profile further. It means that investors, such as asset managers that couldn’t invest in junior AIM stocks, now have the option to buy the shares.

This also includes tracker funds that cover the main market as well. At some point, these passive investments will have to purchase Draper Esprit shares to ensure that the underlying index of the main market is fully covered. All this buying should mean that the stock price should increase. Hence, I’d buy now.

The company expects to transfer its listing and “complete the move within the next couple of months”. I like that there’s a quick turnaround on the upgrade. 

Risks

The firm has performed well on the junior market but there’s no guarantee this will continue, especially after the upgrade. It’s worth highlighting that main market regulation is much higher than on AIM.

The company will likely be scrutinised much more, which could impact the shares. The stock is already trading close to its all-time high, which makes it sensitive to any negative news.

But on the whole, I think this upgrade is positive for Draper Esprit. It’ll certainly be much more visible on the investment radar, which I think is a good thing in the long term.

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The AIM-listed venture capital firm, which invests in European technology businesses, allows investors to gain access to a portfolio of some of Europe’s fastest growing private, pre-IPO, technology businesses.

Draper Esprit’s core portfolio is concentrated, where 67% is invested across 16 companies. These include well-known names such as the online global review site Trustpilot, and the challenger bank, Revolut.

Seed stage investor

Draper Esprit shares also allow investors access to early-stage technology companies, through its seed fund investment strategy, which invests in other early-stage technology funds. Revealed at its full-year results in June 2020, it has invested £39m across 20 seed funds to date. 

Draper Esprit’s seed fund portfolio complements its existing core portfolio and allows the firm to diversify its exposure to European technology companies across the business life-cycle.

Fund raising

With an active history of placings, Draper Esprit announced a successful placing early October 2020, raising £110m.  The Covid-19 pandemic has accelerated the shift to digital technology, and as such Draper Esprit has had to support its portfolio of businesses that cover services such as online payments and fraud detection.

The proceeds from the placing will allow Draper Esprit to deploy funds into new potential future investment opportunities, further diversifying its overall portfolio. It will also allow Draper Esprit to contribute to follow-on funding rounds for its existing portfolio of companies with a view to exit for an attractive Return On Investment (ROI).

Recent activity

The rally in the Draper Esprit share price reflects that the company is an active European venture capital investor. In October 2020 it co-led the $50m series B fundraising of PrimaryBid, a technology platform that allows retail investors access to public companies raising capital.

It was announced in June 2020 that Zynga  would acquire 100% of the Istanbul-based mobile developer Peak Games for $1.8bn. Draper Esprit’s investment upon sale was worth approximately £80m.

Over recent months, Draper Esprit has successfully disposed of its investment in TransferWise, the international money transfer platform. It has led the $20m Series C investment into Ravelin, a fraud detection company. Ravelin uses machine learning and graph network technologies to help online businesses accept more payments with confidence.

A positive update

Draper Esprit posted a mid-year update ahead of its interim results scheduled for release on 30^th November 2020. 

The venture capitalist expects its Gross Portfolio Value to be no less than £695m, and has seen a Gross Portfolio Fair Value increase of £70m over the six-month period, which includes the uplift from the disposals of Peak Games and TransferWise. Draper Esprit remains in a strong position to invest in technology businesses with cash resources at year-end of £62m.

An encouraging outlook

I believe the mid-year update is a sign of positive prospects for the Draper Esprit share price. Investments such as the telemedicine company Push Doctor has allowed Draper Esprit to benefit from the Covid-19 technology boom, which I expect will continue. The management team have successfully displayed their ability to identify, invest and exit European technology companies.   

The post Why the Draper Esprit share price is up 65% in 6 months appeared first on The Twelfth Magpie.

Virtual diagnosis

Virtual doctors’ appointments have taken on a life of their own since lockdown. The ability to book an appointment online and carry it out via video call is simple and increasingly appealing. It means you no longer have to endure a journey, parking, risk of infection or a long wait in the doctor’s surgery. Plus, you get a review of the session sent to you as the appointment ends. From the GP’s point of view, they can see more patients, are at less risk of exposure to bugs and can reallocate cancelled slots more easily than no-shows in a real-world setting. The efficiency of the virtual environment could make a sizeable difference in seeing more people sooner. But sometimes, a doctor will need to examine patients in a real-life setting. 

Share price fluctuations

I imagine healthcare staff will have to continue operating from surgeries to protect patient’s records and privacy, so I do not think telemedicine is an imminent threat to the future of GP surgeries. It does not appear to be something Primary Health Properties is worrying about either.  In fact, the coronavirus crisis may increase demand for purpose-built healthcare facilities. In its half-year results this week, it announced a £120m share placing to fund further acquisitions and growth. 

Primary Health Properties operates as a real estate investment trust (REIT), which means it must share its profits among stockholders. This has made it a lucrative investment in recent years with a rising dividend yield (currently 3.7%). Its share price fell in response to the placing, but has risen 18% since the 2020 stock market crash.

For now, I don’t think telemedicine will adversely affect the PHP share price. I think it is a less risky investment than many other property stocks and I would consider adding it to an income portfolio.

Investing in telemedicine

Telemedicine is relatively new and mainly provided by US companies or private UK companies. However, there is an AIM-listed venture capital firm called Draper Esprit (LSE:GROW) that invests in this area. Valued at around £566m, it has a price-to-earnings ratio of 14, and earnings per share are 33p.

Draper Esprit’s portfolio includes technology companies focused on long-term growth in areas of artificial intelligence, cloud computing and digital health. This includes Push Doctor, which works with the NHS to provide GP video services; MediDate affordably connects its patients with leading surgeons; while Ieso Digital Health provides mental health and therapy support remotely.

The Draper Esprit share price has had a rocky five years. Since the March stock market crash, it has risen 78%, but is still 20% lower than its highest share price this year. I think it looks like an interesting investment opportunity, particularly if you want to invest in new areas of tech and healthcare. But bear in mind, it is a high-risk stock.

The post Could telemedicine upend the Primary Health Properties share price? appeared first on The Twelfth Magpie.

First up is Record (LSE:REC), offering a juicy 6% dividend yield on a price-to-earnings ratio of just 12. The currency-hedging firm has a relatively small market cap of £75m, but two special dividends in the last 12 months show that its bosses are keen to divest surplus cash to pay back shareholders for their faith.

Companies of this size are frequently under pressure to load up their balance sheets with a ton of debt to bolster growth, but chief executive James Wood-Collins has shown remarkable restraint in this regard.

Profitability remains high compared to revenue and everything seems to be heading in the right direction.

Sign me up

The client base of pension funds, asset managers and big corporates is growing strongly, too. Three new institutions signing up from September to December 2019 took Record’s client number to 73. A third-quarter trading update for the three months to 31 December 2019 showed assets under management up 8% to $64.7bn with Wood-Collins highlighting the company’s demonstrable “momentum in terms of new business“.

Earnings per share have forged ahead from 2.66p five years ago to 3.27p. Over the same period, dividends per share have nearly doubled from 1.65p to 2.99p.

Tech specs

The second fast-growing share at the top of my watchlist is the £625m market cap Draper Esprit (LSE:GROW). This venture capital company uses its money to invest in the cream of the crop of profitable, private, fast-growing tech companies across Europe. Its analysts seem to have their heads screwed on right: there’s no cash-flashing here, nor overpaying for the sake of it.

Its bigger names include reviews site Trustpilot, French cloud call software firm Aircall and Bristol semiconductor company Graphcore, which manufactures high-grade computing processors to develop faster machine learning.

Firstly, I like the fact that these are investments you wouldn’t normally be able to get your hands on. Secondly, GROW is doing what its acronym suggests and multiplying its business nicely.

Real gains

Half-year results for the six months to the end of September 2019 showed a pre-tax profit 50% ahead of the same period last year at £58.7m. The Net Asset Value (NAV) of its investments saw a 10% hike to 574p across the six months, and on a current share price around 530p, you’d be getting a nice 7.5% discount if you were to buy now.

I like management’s approach to its investments: Draper Esprit chief executive Simon Cook says his focus is on “prudent” investment with a target of 20% fair value growth per year across the portfolio, along with “maintaining a disciplined approach to pricing and capital deployment“. GROW has 18 companies in its portfolio, suggesting it’s not spread too thinly, and has invested £42m in those businesses in the last six months.

Sensible growth is always better than a flash in the pan, here-today-gone-tomorrow business.

A closer look at the fundamentals also gives me confidence that the shares are not overvalued: the price-to-earnings growth ratio is just 0.2 while earnings per share jumped by 29% between 2018 and 2019.

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