Sunday share tips: Hiscox, Morgan Sindall

The Mail on Sunday's Midas column thinks investors should 'buy' Hiscox stock.

Risks remained, the tipster conceded, but picking up some shares, which had nearly halved in value since July 2019, was "in part a bet on how long the Covid-19 crisis will continue."

Indeed, it pointed to estimates from a number of leading analysts to back up its case.

Covid-19 has proved the 'perfect storm' for the diversified insurer and the costs from the pandemic could still rise by 10% if restrictions continue into 2021.

But Covid-19 aside, analysts believed the company was getting stronger, with premiums growing again - despite the pandemic.

Furthermore, the firm had not raised its estimate on Covid-19 claims since its last update and there was potential for growth in the US small and medium-sized business segment.

"Hiscox is also hoping to return to paying a dividend at some point in the future, although not all analysts believe this will be possible in the short term," Midas added.

"[...] Since the pandemic began, the company has fallen in price and is better positioned for the future in a growing market. Reassuring news about 2021, such as a viable vaccine, would lift the stock and analysts are bullish about how far it could go.

"Jefferies' price target on the stock is £10.20, while Morgan Stanley's is £9.90. Life's a risky business, and investing can be too – but Hiscox might be a good policy at this price."

The Sunday Times's Sabah Meddings recommended buying shares of Morgan Sindall, pointing out how all of the company's units stood to gain from public money to rebuild the economy.

The firm, which operates in the housebuilding, infrastructure and office fit-outs sectors, had repaid government aid and is set to restart its. dividend, declaring an interim payout of 21.0p, which was in-line with last year's payout.

It also finished the third quarter with £7.9bn of secured workload, including the smart motorway, the Thames Tideway tunnel and the Sellafield nuclear site.

Critically, Downing Street had said that construction could continue through the second lockdown and homebuilders were set to benefit from the Help to Buy scheme until 2023, Meddings said.

"Analysts’ price targets vary wildly — Panmure Gordon, the firm’s broker, has a £22.30 target on the stock, while Peel Hunt has £15 — but are well above current trading," she said.

"There is reason to be confident: Morgan Sindall has weathered the Covid-19 crisis and is well placed to make the most of any recovery. Buy."