Sunday share tips: Mpac, Applegreen

The Mail on Sunday's Midas column reiterated its positive stance on stock in drug packager Mpac, highlighting the company's move into the black and its list of blue chip clients.

Its machines can be found at AstraZeneca, GlaxoSmithKline and Unilever factories among others.

Founded as a tobacco-packaging company, it now parcels up inhalers instead of cigarettes, having sold off the unit focused on the latter.

Not only did it move into the black in 2019, it had no debt, Midas pointed out.

Furthermore, trading on price-to-earnings multiple of six, the shares' valuation was not expensive, the tipster argued.

Mpac is fiscally conservative too. The company is debt-free and reported a £5.4m pre-tax profit for 2019, up from a £7.4m loss in 2018.

"Midas tipped Mpac in July last year, when the shares stood at £2.03. It's been a bumpy ride since then, but the shares are already far above that level at £2.55.

"[...] With [Tony] Steels at the helm, there's little danger of the company running out of steam. Worth packing away in your portfolio."

The Sunday Times's Sabah Meddings told readers to "avoid" Applegreen's shares given the risks of an extended lockdown.

Having recently splashed out roughly £300m on a 50.1% stake in Welcome Break, a motorway services empire stretching across Ireland, the UK and North America, the forecourt operator was now facing angry landlords and its creditors even as the pandemic hammered its business.

The government was paying 4,800 of its 11,500 workers in Ireland and the UK and it has cut capital spending, cancelled its dividend and will defer taxes.

Yet saddled with over in debt it had been forced to try and secure rent holidays and reductions with its landlords.

Here too, government had come to the rescue, imposing a moratorium on the use of statutory demands, but that measure was set to run out on 30 June.

"The company must navigate a way between demanding debt holders, thirsty landlords and cautious motorists," Meddings said.

"The question is how long will the money it has last before Applegreen is forced to go to shareholders, cap in hand. Avoid."